Thu, Nov 26 2009
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A hard sale Retailers face tough decisions as their costs continue to rise By RONNIE ELLISCNHI News Service “We see these people every day.” Rediess said. “We really do business with our neighbors.”
Rediess does a brisk walk-in, cold-cut sandwich business. Everything she uses costs more — bread, meat, even the mustard and mayonnaise. Soft drinks, too. The day she was interviewed, she paid a $15 fuel surcharge on top of the wholesale price for 10 cases of Pepsi. Because of its smaller sales volumes and distance from Glasgow and Bowling Green, the store pays higher wholesale prices for gas. That makes the price per gallon higher. Rediess has noticed some customers who used to fill up at the 1297 Market now buy “three or four gallons to get them to town where they can fill up for less.” According to Marita Lile of Witty’s Muffler Shop in Glasgow, customers are cutting corners on maintaining their vehicles as fuel costs rise. “People are only doing what they absolutely have to do,” Lile said. “They’re waiting until their water pump completely goes out or their tires go completely flat. When people are spending so much on gas that they can’t afford groceries, they aren’t spending money on car repairs.” Their decisions may be endangering others, she said. “People are driving on tires with the steel showing,” Lile said. “It’s dangerous and it’s dangerous for you and me out there on the road with them.” Things are no better in the restaurant industry. Stacy Roof, president and CEO of the Kentucky Restaurant Association, said restaurants see less business while enduring climbing prices. She said food costs are up between 50 percent and 100 percent over a year ago. Flour, for example, is up 70 percent over last year. “Everything is higher and the suppliers are adding transportation surcharges on top of that,” Roof said. “Gas is the root of all this evil.” Like Wininger and Rediess, restaurant owners sometimes find it difficult to pass along higher costs. Roof said customers are already cutting back. “People are still going out, but they are spending less of it at sit-down restaurants,” she said. “Instead of buying a steak dinner, they’re going for a hamburger.” Roof said when patrons see a crowded parking lot or have to wait for a table, they incorrectly assume the restaurant is raking it in. But, she said, the average profit margin is between 3 and 4 percent at restaurants — before fuel prices went up. Now business is down. And it’s not just the owner who’s feeling the pain. Waiters and waitresses do too. “If a restaurant isn’t as busy, the tips aren’t as plentiful,” Roof said. 
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