Kaune's complaint

John Kukulski complained on Nextdoor about the prices of hand sanitizer and face masks at Kaune's Neighborhood Market. Store owner Cheryl Pick Sommer responded that the result of his public venting ‘was to falsely impugn the integrity of a small local business that operates by a philosophy of fairness towards its 25-30 employees.’

Clarification appended

John Kukulski was excited to see a bottle of hand sanitizer for sale Friday at Kaune’s Neighborhood Market on Old Santa Fe Trail. It was a rare find at a time when most stores have had a shortage.

Then he saw the price tag.

The 1-liter bottle of Vlanc Piür hand sanitizer was marked $39.99. Nearby, a box of 50 three-ply disposable face masks was priced $106.69.

He asked a Kaune’s employee to confirm the prices, Kukulski said in a phone interview Wednesday. “At that point, we were so turned off, I said to my husband, ‘I don’t even want to buy anything,’ ” Kukulski said. “We left without the groceries we had even intended to buy.”

His husband, Christopher Kukulski, submitted a complaint Sunday to the Attorney General’s Office expressing concerns about price gouging at the store. A spokesman at the agency said the office has since sent a cease-and-desist letter to Kaune’s, a locally owned grocery store, ordering it to stop overpricing items during the public health crisis.

“I understand that prices are going to be higher right now for supply and demand,” Christopher Kukulski wrote in the complaint. “However, that isn’t anywhere close to what is being sold in other stores or what it would have been previously.”

Kaune’s is one of more than 250 stores across New Mexico that have been accused of raising prices on certain items in high demand during the COVID-19 pandemic. It is one of six local businesses that have been ordered by the Attorney General’s Office to stop the practice, senior counsel and spokesman Matt Baca said.

Kaune’s owner, Cheryl Pick Sommer, said she was aware of the complaint and called the Kukulskis’ allegations “completely unfounded.”

“I have responded to the complaint, and that is all I am going to say about it,” Sommer said Wednesday.

A day after Gov. Michelle Lujan Grisham declared a public health emergency in March in response to the pandemic, Attorney General Hector Balderas issued a warning to consumers about the possibility of price gouging for items like medical supplies, face masks and hand sanitizer.

Instances of the practice have been reported nationwide since early March, when concerns about the novel coronavirus, which causes COVID-19, began to escalate.

So far, Balderas’ office has received 254 complaints of price gouging, Baca said, including nine filed against businesses in Santa Fe County.

The office so far has sent seven cease-and-desist letters to six local businesses: John Brooks Grocery in Eldorado, Food King (two orders), Smith’s, AmeriGas, Owl Liquors and Kaune’s.

There is no legal definition of price gouging in New Mexico, Baca said, because the state does not have a specific anti-price-gouging statute, but the Attorney General’s Office views “state consumer protection laws as prohibiting the sale of goods at unfair or unconscionable prices during a state of emergency.”

“Increasing prices on necessities like medical supplies, hand sanitizer, masks, and other items because our communities are in fear of the coronavirus is simply unconscionable,” Balderas said in a statement provided by Baca. “Anyone increasing prices in order to illegally profit from this emergency will be prosecuted.”

John Kukulski posted photos of the hand sanitizer and face masks at Kaune’s, along with their price tags, on the website Nextdoor and said Sommer responded by reaching out to him soon after on Facebook Messenger.



She told John Kukulski the result of his public venting “was to falsely impugn the integrity of a small local business that operates by a philosophy of fairness towards its 25-30 employees.”

“I priced the masks the same as I price every other item in the store,” Sommer wrote to Kukulski. “I did not, nor would I attempt to ‘swindle’ (the definition of gouging) the consumer by overpricing such a necessary and highly demanded item.”

Sommer’s actual markup on the items is unclear.

The box of masks had a sticker showing they were purchased from Sysco, a restaurant and grocery supply company. But a Sysco employee said they could not provide wholesale product cost information to anyone who doesn’t have a purchasing account with the company.

An online search showed the retail price for a box of 50 disposable, three-layer face masks can vary widely — from about $13 to about $50 — depending on the seller and the brand.

Vlanc Piür hand sanitizer sells for about $20 on various sites.

Clarification: This story about a complaint a customer filed with the Attorney General’s Office about pricing at Kaune’s Neighborhood Market quoted a spokesman who termed the letter the office sent to the store owner as a cease-and-desist letter. In fact, the letter does not specifically direct Kaune’s to “cease and desist” from engaging in any particular conduct.

The letter, addressed to Kaune’s, reads as follows:

“To Whom It May Concern:

"The New Mexico Office of the Attorney General has received a price gouging complaint against your store. According to the complaint, Save Mart Store located in Las Cruces, NM, has unreasonably and without justification raised the protective masks and hand sanitizer.

"Attorney General Hector Balderas recently issued a consumer advisory warning against COVID-19 or Coronavirus related price gouging. For your convenience, we have attached a copy of the recent complaint and recent advisory. We advise that you immediately review your pricing strategy and would also ask that you provide our office with a response to the allegations noted above within ten (10) days of receipt.”

The letter goes on to give the address and email contact information of Jennifer Saavedra, a director of the Advocacy and Intervention Division for the Attorney General’s Office, and is signed by Brad Hill, an advocate of that division.

Contacted Monday, the Attorney General’s Office acknowledged the letter’s reference to “Save Mart Store located in Las Cruces, NM” was a typographical error, but Attorney General’s Office spokesman Matt Baca continued to characterize the letter as a “cease and desist” communication, reasoning the letter “warned [Kaune’s] to follow the law and to evaluate their pricing strategy.”

In her response to the letter, co-owner Cheryl Pick Sommer cqwrote the store regularly did not carry disposable face masks, but sourced them to satisfy customer requests. The product, she wrote, arrived at a high cost per box plus applicable fuel charges.

“To derive the retail price for which we offered the masks ($106.69), we used the same calculation that we use to price every item in the store. That is to say we applied our standard margin for items in the same or similar segment. We did not “increase” the price on this item above what it would be during an ordinary business climate, nor did we attempt to charge an unusually high price for this item.”

In the letter, Sommer also offered a similar description of the store’s pricing calculation for hand sanitizing gel.

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(40) comments

David Markun

They have the right to charge whatever they want. Don't like it, then leave.

Richard Reinders

Without knowing what she paid to get these products, how can you say gouging, and when you let someone else tell you how to markup products you go out of business quickly. I see a box of 10 masks advertised for $29.00 on TV, you can buy anywhere you want without whining that is what makes it a great country

Jonah Dempcy

Put otherwise, the average national mark-up of products is around 14%. The price that I find for online retailers ($49.99 for this exact product, same brand) is likely closer to a 10% markup since they don't have as much overhead as retail stores. So we can see that the wholesale price is around $45. This means Kaune's is charging well over 100% mark-up, or close to 8-10 times more markup than other retailers. Just the facts.

Jonah Dempcy

A quick Google search yields this exact product for $49.99. It's a free country so Kaune's can charge whatever they want—$100, $1000, whatever. However this goes both ways, and when they do, it is also freedom of speech to write an article about their price gouging, and that is what it is.

People in this comment thread mad at Santa Fe New Mexican for front page story calling out Kaune's should realize that freedom goes both ways—Kaune's is free to charge 200%+ of the going rate for products, and our free press is free to call them out on it for price gouging, which is what it is!

Irene Edwards

We lived in Florida nine years. I remember during hurricanes that stores, hotels, motels, fuel stations price gouged. Then they put a law in place to stop that.

steve schoninger

Kaune has quality products including meats that are not available in the chains...kaunes has excellent convenient curb service as we live in Tesuque.....

Angel Ortiz

Sounds like price gouging to the extreme. Pretty disgusting and very disappointing. One store to definitely stay away from. Even more disturbing is that this is a Santa Fe locally owned store. Nice way to take care of your community.

Connie Lopez

Of course it's price gauging. But consumers are ignorant enough not to care, so I say keep increasing the price until the product stops selling. Capitalism. Connie Lopez-Lucero

Khal Spencer

There are plenty of options in Santa Fe. If you don't like one place's choices or prices, go somewhere else.

Celia Baldwin

This is an example of how access to social media allows people to vent within a bubble.

If you have a problem, talk to the store personnel directly first. It is important to be thoughtful and kind, especially in a pandemic, and deal with an issue such as this in person.

Jeff Guy

Kukulski obviously has not tried to buy quality face masks online or from any other retailer, if available...the price offered by Kaunes is well within market. It’s a matter of supply and demand...economics 101! Instead of trashing local retailer serving local needs...brush the entitlement (I deserve something for nothing) chip off your shoulder, face reality and buy a bandana. Shame on the New Mexican for not price checking the current face mask market prices!

Nicoletta Munroe

Kaune's is intended to be a neighborhood market for the community. Decades of patrons hold accounts there. The recent price increases are incongruent with the reputation of the store. The new pricing is about a year-old phenomenon. Yesterday, I was at the store and I remarked about the mark-ups. When I hesitated to purchase an item, Hellmans mayonnaise, that was marked as twice as expensive as a traditional supermarket, a male employee balked and called me "a girl". Thus, not only is Kaune's price gauging, they are rude to patrons. The incident occurred near the meat market.

John Onstad

Nicoletta:

Yes the mayonnaise is stocked near the meat. So why don't you drive 5 miles round-trip to Sprouts (at $.56/mile) and buy their miserable house brand mayonnaise (instead of Hellman's) for $1.00 less?

It would be the green thing to do.

John

Mandi Ravan

Wow john, how about our caring local super expensive Kaune's instead NOT charge doub l e the normal price? All it does is increase inequality. Is Kau es now just catering to the superrich newcomers. They and kaunes shd be ashamed.

David Cartwright

Let's see. Kaune's has a great over-priced butcher shop, disgusting old and over-priced produce and over-priced everything else. Short check out lines though and easy parking. I also remember being told by a checker once that they had stopped carrying the wall street journal because some customers complained. No comment other than don't shop there if you don't like it. And I don't.

Leo Catelli

What would be customers’ issue with the Wall Street Journal?

John Onstad

Leo:

WSJ is too well-written, interesting and diverse. Furthermore, it supports a free-market economy. Anathema to ideologues.

John

Leo Catelli

If what happened is true (customers complaining about the WSJ being sold in the store), I suppose I wouldn't be too surprised. I forgot that the WSJ has a center-right ideology, but still a very credible news source.

I suppose that would send a lot of Santa Fe people into a fury to have to acknowledge the existence of and tolerate differing ideologies.

Bonnie Cox

Kaune's is a mom and pop store that fits a niche. Don't expect WalMart prices. They are not a national chain that buys in volume and can pass their discounts on to their customers. If you need a jar of mustard and they are in your neighborhood, go there.

That would be far cheaper than starting up the car and driving to a chain store to save a quarter. Sometimes, logic comes into play.

Carmen M

Lazy journalism. Should have at least attempted to find these items in local stores and report the prices. Using front page to malign Kaune's is petty and unfair.

Erin Currier

It is no secret and it is hardly news that some of Kaune's products are extremely expensive, however, the majority of what they offer is comparable to everywhere else, and a few of their items are even cheaper than elsewhere (ledger pads, dental floss, dish sponges). I have shopped there for years-- never to stock up, but just to buy a few items. The owner and staff are wonderful, and I love that mom & pop places like Kaune's still exist in New Mexico.

If you look closer at the box of face masks: there are 100. Maybe Kaune's was planning to sell them for $2.00 a piece which seems reasonable-- which would come to $100 for the box. Maybe they left it at $100 so no one would buy them all at once?

What is far more infuriating to me is that corporate big boxes like Walmart & Home Depot have been allowed to stay open throughout the pandemic whereas mom and pops like Payne's Nursery were forced to shut down. We need to support local business & support one another.

That's why I for one will continue to buy lemons and ledger pads at Kaune's (but obviously not hand sanitizer lol)

Erin Currier

Irene Edwards

But, the local nurseries are open again. We just bought things at Newman's. So, they are open, though in the beginning they were closed.

John Onstad

Most stores use a computer that applies a mark-up to every product. Mark-ups may differ for meat, or canned goods or produce, etc. but they're applied uniformly.

Furthermore, Kaune's isn't a big box chain and doesn't have the ability to offer discounted prices very often.

I know Cheryl too well to believe she intentionally raised her mark-ups on these items.

This fellow should have talked to Cheryl before making these unfounded accusations.

John Onstad

Harvey Wright

Kaunes was price gouging long before the pandemic

John Onstad

Harvey:

Like any good leftist you resent a business selling their products at a profit.

"Profit" is a dirty word to you. "Profit" is why we have grocery (and other) stores with products on their shelves for your convenience. Go live in a tee-pee in Taos and shoot rabbits for dinner.

John Onstad

Harvey Wright

I can't I'm too busy seizing the means of production

Stefanie Beninato

Whether you like Kaune's or not, it is very expensive for many Santa Feans and Ms Sommer's response lacks specifics and instead lashes out at what seems a legitimate complaint. Your (Steve) emphasis on someone's eye color has implicit racial/ethnic bias. Call the complaint what you want, keep the person's physical characteristics out of it.

John Onstad

Stephanie:

You write: "Ms. Sommer's remarks lacks specifics."

You don't even know if the New Mexican properly, fairly or completely quoted Cheryl Sommer. I suspect the paper selectively edited and reported her response to suit their story and leftist, anti-business bias.

John Onstad

Leo Catelli

This place has always been overpriced, even before the Coronavirus. It clearly caters to the wealthy echelon of Santa Fe, so I suppose they assumed those prices were chump change to their customers.

Regardless, that's quite messed up if it's true. You'd think there'd be more state-wide restrictions on price gouging in place.

Amy Earle

Yet in Germany masks are provided via vending machines around the country. Hand sanitizing stations are readily available for all to use. Not so in this once great country. The name of the game is let the federal government off the hook for providing nothing to protect its citizens. It’s everyone for themselves. It’s no wonder price gouging abounds. This could be easily solved if we lived in a country that cared about public safety. We don’t. Shame on all these stores and shame on our federal government for passing the buck on everything.

Ramon David

So after Trump we still need to Make America Great Again? (sarcasm) I believe we do need to care more about public health. Germany also has better and true universal health care and a better welfare state so everyone knows they are covered in a pandemic ad do not have to go without health care or line up or food donations. Public Safety would imply law enforcement as in the NM Department of Public Safety which includes the State Police although it does handle disaster and emergency response as well.

Mandi Ravan

Correction: after Trump is when we will have to make America Great Again!

What he meant was, after Me, you will HAVE TO !!

David Markun

Yes and Germany has fewer people w less problems.

Leo Catelli

Well, Germany is a heck of a lot smaller than the US. I know it’s easy to look at Eirope or up north at Canada to say how they’re doing things better, because for a lot of things, I agree it’s true.

I think perhaps one of the issues with our countries dysfunction is our size geographically and population wise. Individual countries in Europe have way less to deal with comparatively. Perhaps we’d be better off as a bunch of smaller countries by region, lol.

Cathryn Miller

I returned from international travel and self quarantined for two weeks. Kaune’s delivered me groceries, allowing me to do so. Thank you Kaune’s!

Demand and prices for PPE are high right now.

Everyone is on edge right now. It is unfortunate that the shopper lashed out.

Leo Catelli

It is an effect of supply and demand, but I don’t think charging nearly $40 for hand sanitizer is a widespread thing in town.

Most businesses know their client demographics, and Kaune’s is clearly not where working class people shop. I think the people rolling up in the Range Rovers and BMWs with California license plates are the ones they were targeting.

steve schoninger

i agree......

Connie Lopez

I call it capitalism

Steve Spraitz

If it were not for Cheryl , and her fine staff, I’d of starved after I got of the hospital for an abdominal aortic aneurism surgery , after 7 weeks in the hospital

She delivered groceries to me for free every week until I could get out on my own after I was released from the nursing home

God bless Cheryl and the entire staff at Kaunes neighborhood market

Steve spraitz

Jarratt Applewhite

Bingo!

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