Small Businesses Consider Impacts of Rising Gas Prices
Gas prices are rising, and some analysts are predicting the price for premium fuel will hit $5 this summer. What kind of impact is that having on your small business? If you are like most small businesses, it really hurts. But there is good news from Washington and from the auto industry.
First, the bad news. More than 64 percent of small business owners in a DollarDays International survey blame rising gas prices for driving down revenue. And it gets worse—more than 25 percent of small business owners expect to have to lay off employees because of the impact.
Meanwhile, 58 percent say customers are driving less. That equals fewer shopping trips. Small business owners also expect that trend to worsen in the summer months.
Mom and pop retailers are especially feeling the pinch. According to a recent report from real estate research company Reis Inc., strip malls and neighborhood shopping centers have a higher vacancy rate compared to malls. Reis predicts the vacancy to rise 11.1 percent this year, up from 10.9 percent in 2011. That’s the highest vacancy rate since 1990.
That was the bad news. Are you ready for some good news?
U.S. Treasury Secretary Timothy Geithner is optimistic, even in the face of rising gas prices, Bloomberg reports. Geithner told NBC’s “Meet the Press” that the economy can withstand the impact of higher gas prices because the economy is gaining strength. He said the increasing gas prices would only “modestly” impact an economic recovery.
What about electric cars? A Fast Company article suggests that the acceptance tipping point hovers around $5 a gallon. At least that’s what a survey from Deloitte discovered. The main conclusion of the survey is that the higher gas prices go, Fast Company reports, the more consumers favor the notion of electric vehicles.
“When gas hits $5 per gallon, 78 percent of Americans surveyed said they'd consider purchasing an electric vehicle,” the article reads. “But U.S. consumers actually expect to have their cake and eat it: Over 50 percent aren't willing to pay any premium at all for an electric vehicle over a gas-powered one, and over 77 percent expect to pay less than $30,000.”
So don't panic. This is all part of the ups and downs of the economy.