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.