Springtime is the busiest time of the year for Chantilly-based Distinctive Lawn Care Inc., which means co-owner Rick Whisnant is logging nearly 1,000 miles a week driving from one suburban project to the next. And with gas at nearly $4 a gallon, his fuel costs alone are nearly $500 a month more than they were last spring. “It changes everything,” he said. “For now, it means more money out of the pocket, less for pay raises, less for everything.”
The same gas prices hitting Whisnant’s bottom line are hitting his customers, too. A client canceled a contract Wednesday morning after taking a second look at the family budget.
“We had to give back the down payment – that kind of sucked,” Whisnant said.
The steadily increasing fuel prices, which are expected to continue rising through the summer, are gouging the profits of small-business owners and slowing the D.C. area’s nascent economic recovery.
Across the Washington region, gas prices are approaching all-time highs, rivaling the post-Hurricane Katrina prices that topped $4 per gallon. Before that, the biggest spike was in 1981, when inflation-adjusted gas prices reached about $3.63.
“The effects will be varied, but significant,” said Peter Morici, a business professor at the University of Maryland.
In places like Northwest D.C., where residents are relatively wealthy and put fewer miles on their cars, small businesses likely won’t notice a big decline in customers. But in the suburbs and exurbs – places “premised on cheap energy,” Morici said, the effects will be much more profound.
“The healthy competitors will grab market share, and the weak will go out of business,” Morici said. “The restaurant that was always half full will now be only a quarter full.”
At Caruso’s Florist near Dupont Circle, Mike Caruso spent $7,000 last month on gasoline. Now, he’s spending time plotting the most efficient routes for his eight delivery trucks, and making sure each driver has a GPS system.
“If I cut down on my area some, then I’d have to cut down on my employees, and I don’t want to do that right now,” he said.
For Kat Santangelo, whose KitchKat catering service delivers meals to homes in the District, Bethesda and Arlington, higher prices mean curtailing plans for company growth.
“I’d be delivering to more places if gas wasn’t so expensive,” she said.
Last month, Santangelo increased her delivery from $2 to $3 to help cover gasoline expenses.
“I think everyone is getting used to having to spend a little more money,” she said. “It hurts, though.”
