$5-a-gallon gasoline would hurt local businesses

Published 10:31 am Wednesday, February 22, 2012

FRANKLIN—Golden Skillet owner David Shields expects his food costs to increase by 15 percent and his customer base to drop the same if gas prices hit $5 a gallon by summer.

Jack Foster, 67, of Franklin pumps gas at the Slip-In store on Armory Drive Tuesday afternoon. Gas is expected to hit $5 a gallon by summer. -- DALE LIESCH | TIDEWATER NEWS

“It affects everyone across the board,” said Shields, who in addition to the restaurant in Franklin owns Golden Skillets in Ahoskie and Windsor, N.C. “People will eat out less, go to the movies less and buy fewer clothes.”

National media outlets are calling for gasoline to jump to a record-high $5 a gallon before Memorial Day. The national average for a gallon of regular hit $3.57 on Monday up from $3.17 a year ago, according to AAA. The all-time high nationally was in July 2008, when an average gallon of regular unleaded sold for $4.11.

The news concerns Shields, who expects a bigger drop in dinner sales than lunch sales; dinner accounts for 40 to 50 percent of his business.

“Families will eat at home more because they’ll have less money to spend,” Shields said.

Neil Drake, owner of Grayson and Emma’s Garden Spot in Courtland, said his freight costs will increase as gas prices rise.

“It’s not devastating, but it’s a pretty good hit,” Drake said. “When oil prices go up, everything goes up.”

Drake expects to see fewer customers at his Route 58 store when gas prices increase.

“I think it’ll have an effect being that we depend on this road and so much of our business comes from travelers,” Drake said. “We’re going to be optimistic and keep our prices low.”

Vickie Ricks, owner of Vickie’s Country Store in Courtland, has seen a little slack in business due to rising gas prices and expects it to get worse through the summer.

“I do see a little difference in it,” she said.

Ricks said if gas gets above $4 a gallon, she will do away with customer charge accounts.

She doesn’t expect an increase in food costs.

“If anything I’m doing as well now, or twice as good as last year in food sales,” Ricks said.

The Comfort Inn in Franklin expects to take a hit from higher gas prices.

“We are really worried that the price could go to $5,” said hotel owner Mike Desai. “It’s really going to have a big impact.”