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Bloomberg Business Week reports that in a conference call with analysts this week, Costco CFO Richard Galanti explained the retailer’s approach to margins and keeping prices as low as possible in a time of food price inflation.

“When you look at -- I'm making these exact numbers up -- but if you look at a 15-pack of muffins or something ... we sell a heck of a lot of those to restaurants and businesses and convenience stores.,” Galanti said. “And I don't know the price of the top of my head right now, but if it was at $5.49 or $4.99 or whatever the (price) was, you tend to hold off and realize a lower margin for several weeks or a few months and then finally bring it up to that next level of 30 or 50 cents extra and you get back to your regular margin in that stuff. That is not a competitive issue, other than we want to protect the prices to the members that are buying these items. We feel that overall our margins have been quite good, and we continue to do that kind of stuff.”
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