'Our customers were pretty understanding': Hit by high gas prices, Northern Michigan businesses adjust to cost




  • In Business
  • 2022-09-24 10:03:18Z
  • By Petoskey News Review

NORTHERN MICHIGAN - Gas prices have been seeing a steady decline over the last few weeks, with a slight uptick in early September. Whether this downward trend will continue is unclear, but even with the gradual drop in fuel costs, businesses are having trouble keeping up.

As of Friday, the average cost of gas in Petoskey and Charlevoix was $3.89 per gallon, according to GasBuddy.

For Mighty Fine Pizza in Petoskey, high gas prices have made hiring delivery drivers much more difficult because the drivers pay for their own gas.

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"When they are paying for their own gas and they're doing all these deliveries, if they don't make that up in tips, that's especially hard on them," Mighty Fine co-owner Ambre Flynn said. "So as gas prices went up, we had to adjust our delivery fees to kind of help them out a little bit."

Flynn said one of her drivers pays about $20 per day for less than half a tank of gas and that to fill his tank completely costs about $60.

According to Flynn, Mighty Fine Pizza currently only has two delivery drivers, when they need three. In the past, she said they used to get lots of applications because drivers can make good money, but they haven't received a job application for a driver in almost a year.

With only two drivers on staff, they have been forced to do pickup-only days or make customers wait longer for their deliveries. Despite that, customers have been fairly understanding and the Mighty Fine delivery drivers have even received good tips because of the high gas prices.

"I think our customers really understand, especially our local customers. I've had times where I've had to do pickup only because I don't have a driver. If one of my drivers called in or has car troubles or something's going on, I got to do pickup only," Flynn said. "So they understand, I mean, I lose some customers, but other times they're willing to come in and pick it up. So they've been really great, our customers."

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The Beaver Island Boat Company
The Beaver Island Boat Company's Emerald Isle.  

For the Beaver Island Boat Company, higher gas prices forced them to add a $4.50 fuel surcharge for passengers and $16 round-trip for vehicles to make up the cost of diesel in the spring.

Manager Tim McQueer said that surcharge will be reevaluated soon as the company gets ready to lock in their gas prices for the next year. Every year, the company is able to lock in its fuel costs for its boats so, while its fuel costs did increase, it was able to avoid the worst of the price surge. Whether the surcharge is kept will depend on the price the company is able to get for the next year.

The boats are not the only thing that runs on fuel though. McQueer said they have seen the impact with support equipment like vehicles and forklifts that use the regular fuel, instead of the locked-in diesel.

In order to fully cover the increased cost of fuel, the company would have had to increase prices by about 15 percent. Instead, the surcharge was implemented, which covered about half of the increased fuel cost and the company absorbed the rest.

According to McQueer, the customers understood the need for the surcharge, as many of them were seeing the increased costs themselves.

"Everyone was seeing the increase in prices and fuel and basically a lot of other consumer goods. So, it was kind of expected and they understood that fuel is such a big part of our operation, so our customers were pretty understanding," McQueer said.

As prices have continued to decline, McQueer said he has seen more optimism from customers.

"We've started to see more customers that are coming in with a more positive outlook. For a while people were concerned about if it was just going to continue to go up and I think now that they're starting to see it come down, their outlook has been a little more positive on spending that eventually (prices) will go back down below $3, hopefully."

This article originally appeared on The Petoskey News-Review: Gas prices decline, but inflation still impacting Northern Michigan businesses

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