The Glass Is Always Full When You Are Informed

Cited: CNN

The many businesses that use fuel as a part of their core business are bracing for even higher prices at the pump to come. And frankly, what business doesn’t rely on gas. Even if you don’t use it directly chances are that the products that you buy will be more expensive because of fuel surcharges added on by your vendors. There is no way around the fact that most small businesses in America are going to feel the crunch of higher gas prices and nowhere is that more evident than among those that deliver their goods to your home or those that use some type of vehicle to sell their products, like food trucks.

The online grocers, bakers, and the huge number of fast-food trucks that have sprung up all over the urban landscape of the U.S. are in for some very tough times given the outlook for gas prices and for many of them their only recourse is to raise their prices and to get even more diligent about watching their overhead in other areas of the business that perhaps in the past were ignored, such as labor costs and other incidental expenses. Among those other businesses that are also considering dramatic actions to offset the rising price of gasoline are those businesses that drive their products to market. Across the country many U.S. cities are dotted with farmer’s markets where farmers from across the surrounding countryside come to sell their produce, meats, and specialty food products. Among many of the farmers are also artisan bakers and chefs who also frequent these markets to sell their goods and now with the price of a gallon of gas approaching or topping $4/gallon in most U.S. cities, many of these vendors are considering cutting their staff or not participating in these markets all together.

Other vendors that deliver their products to their customers, such as online grocery operations, and other such businesses are once again considering cutting out some of their customer base; never a great option when building your customer list is usually seen as tantamount to your success. However, some of these businesses cite other times in the past when market conditions left them no other choice but to pull in the wagons and reduce the area being covered by the business.  One of the better known gourmet food trucks operating in the NYC area says that he will have to completely change the way he does business. Now, this vendor, who asked not to be identified, said that while he usually drives his truck and parks it all over the five boroughs of NYC at designated times during the month so as to create something of a scarcity effect for his gourmet food, he may not be able to continue to do so because of the high cost of driving the gas-guzzling kitchen on wheels around the city. This could change the entire business model that has worked so successfully for him in the past as customers lined up waiting for his truck knowing that it would not be back around again for another month. Now, I guess he’ll have to choose the most profitable location on his route and hope for the best.

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My take:

Just when things appear to be getting better the price of gas throws a monkey wrench into the works and here we are all over again. I don’t think things are going to get any better any time soon when it comes to the price of gas so it remains to be seen just how much of  an impact the higher prices are going to have on the economy.

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