Alaskans ordering eggs and bread from 300 miles away 5-15-07

ANCHORAGE, Alaska (AP) - Diane Seitz, a teacher in the tiny village of Koyukuk, reels off the prices at the village's only store, a weathered wood shanty with three meagerly stocked aisles and no regular business hours.

Eighteen eggs cost $5.35. Four chicken patties are $6.75. Seitz recently managed to salvage six slices from a $4 loaf of moldy bread.

Local prices are so high and inventory so sparse that Seitz, like many Alaskans living far from the road system, buys nearly all her food and household staples from big-box chain stores in cities hundreds of miles away.

At least once a month, she sends her shopping list to Safeway in Fairbanks and pays a small airline to fly her groceries across 300 roadless miles to the Athabascan Indian village of 100 people on the banks of the Yukon River.

The business generated by such customers is impossible to quantify, but it's big enough that several stores, including Wal-Mart, Home Depot and Best Buy, devote whole mail-order departments to more than 200,000 rural residents spread over an area twice the size of Texas.

Mail orders generally make up less than 10 percent of business, but the service helps win over repeat customers who consistently place large orders, store managers say.

“The mail orders are probably 3 percent of our total sales, which doesn't sound like a lot, but it is,” said Dawn Hudson, receiving and shipping manager at Home Depot's Bush Department in Anchorage.

The stores don't account for those rural shoppers who make shipping arrangements on their own through personal shopping companies or family members. Many people merge big shopping trips with other business in town and lug bulging luggage on the plane ride home.

“We have a daughter who lives in Anchorage and she does some of our shopping,” said Natalie Baumgartner, 61, city administrator in McGrath, a town of 350 on the Iditarod Trail. “If I'm flying, I always bring back meats, fruits and vegetables in my hand-carry. I think I'm typical in that sense.”

The big-box stores' back rooms provide a glimpse into the buying habits of rural shoppers from Barrow on the Arctic Ocean, to the Aleutian Island fishing port of Dutch Harbor, to dozens of villages in the vast Interior.

Employees at Wal-Mart in Anchorage box up goods every day with the store's most popular rural products: toilet paper, diapers, laundry soap, dog food and soda. Big orders also come in for toys during Christmas and children's birthdays, said store manager Marty Howard.

In Fairbanks, 260 miles due north, a bush department at the Fred Meyer store keeps its quickest-moving inventory on special shelves within easy reach of packagers. The top sellers? Spam, Vienna sausage, boxed milk, Ramen noodles and Sailor Boy pilot bread, a dense, round, long-lasting cracker. The store also sends tons of canine chow to sled dog owners around the state.

The savings on small items come in noticeable increments, but they can be downright dramatic for large specialty purchases, such as appliances and sporting goods.

Wal-Mart charges 10 percent of the total price to box and mail goods. Other stores charge a similar percentage or flat rates. Shoppers then pay to ship their goods through the post office or a flying service of their choice.

“I think they charge too much, but I'm not going to argue about the prices because I need these things,” said Seitz, who moved to Alaska two years ago from south Texas.

In the villages, prices are high because stores must keep up with freight costs, and the tiny communities simply can't support much competition, said state labor economist Neal Fried.

“With the big store specials and things like that, there's no way we can compete,” said Dale Arkell, general manager of the Kaltag Co-op. “We're basically selling to people who are in between orders.”

Like many small stores in the Bush, Arkell stocks his shelves with merchandise from his urban competitors. After the spring thaw, he heads to Fairbanks to shop for large appliances, and tables and chairs. He trucks the goods 55 miles south to the barge dock in Nenana and ships everything to Kaltag, 450 miles down the Yukon River.

The village stores survive because they are convenient and have personal relationships with customers that can't be built from hundreds of miles away, said Rex Wilhelm, president and chief operating officer of Alaska Commercial Company, the largest rural retailer in the state.

“Once the river freezes over and the barge quits running, if your fridge goes out in wintertime, we're basically it,” Arkell said.