High gas prices taking toll on some local businesses

With gas prices rising by the day, it’s costlier for businesses in the business of delivery.

By: | Opelika Auburn News
Published: May 19, 2008

It’s harder for Elaine Hannah to bring people bouquets these days.

Hannah owns Elaine’s Crafts and Florist on Glenn Avenue in Auburn. With gas prices rising by the day, it’s costlier to deliver flowers to customers, she said.

“I’m not even breaking even” on deliveries, Hannah said. “…If (the price of gas) continues to go up, I’ll have to go up on delivery again. It’s just that simple.”

Some of the extra fuel cost gets passed on to the customers, she added.

“Most of our regular customers understand we have to charge for delivery,” Hannah said. “They’re not thrilled about it, but they understand.”

Like Hannah, businesses — especially those that deliver — are having a hard time coughing up gas money.

The price hike has affected Tricia Hamman, too. As general manager of Pizza Hut on Pepperell Parkway in Opelika, Hamman has trouble keeping drivers.

“When you have to charge the customer a delivery fee, it cuts down on (drivers’) tips,” Hamman said. “My delivery business is dying down a little bit because people don’t want to pay the delivery charge.”

When gas prices rise, it raises the cost of everything from transportation to delivery costs, and some of that cost gets passed along to the consumer, Auburn University Luck Economics Professor Dan Gropper said. But they can’t pass along all the costs.

“Businesses have to figure out how they can adjust,” Gropper said. “They can’t just pass along all the in-creased costs because there are competitors, and consumers won’t necessarily pay for all that.”

Businesses have to figure out how to produce and deliver goods and services more cheaply, he said. But in areas like delivery, you can’t really cut services, so customers sometimes end up paying more.

Gropper said he doesn’t see fuel costs declining anytime soon. With growing numbers of drivers across the world, especially in countries like China, the demand is likely to rise, he said.

“If we don’t start exploring and refining more around the planet, we can expect to see continued higher gas prices,” Gropper said.

For people like Opelika Postmaster Terry Dozier, that means more stress on operating costs.

“We can’t, just like every consumer, say we won’t go on those trips as often because of additional expense,” Dozier said. “We have to be out there every day in every neighborhood. It’s something we just have to ab-sorb and go on and deliver the mail.”