The Department of Commerce carried out a special inquiry into average retail prices in Manu’a in December.
The staff surveyed retail prices of goods available at five retail stores on Ofu and Olosega.
They found that in general, retail prices on Ofu and Olosega are about 70 – 80 percent higher than Tutuila.
This means that a commodity that costs $1 on Tutuila is roughly $1.75 in Luanu’u.
According to the Department of Commerce, prices for some goods such as meat products are twice as expensive in Ofu and Olosega than on Tutuila.
For instance, a case of chicken is sold at about $25 in the Luanuu compared to $12.85 on Tutuila.
A 16 oz packet of sausages which costs $1.50 on Tutuila is about $3.85 in Ofu and Olosega.
A dozen eggs sells for $1.63 on Tutuila but costs $4.08 in the Luanuu.
According to DOC, all commodities in the survey are finished products or final goods.
Since there are no additional taxes paid by retailers in Ofu and Olosega, the higher prices of goods there can be attributed to either profit margins and/or higher variable costs.
DOC says the variables for goods sold in Manu’a include transportation which means freight, fees and insurance.
Hypothetically, a Manu’a business that charges 80 percent more for a product, over Tutuila prices, should be able to maintain at least a 50 percent profit margin, even after factoring in 30 percent higher costs.
