The day – Gas-dependent businesses fueled by the community with rising prices

As gas prices rise and show no signs of slowing as summer approaches, companies are passing on some of the increased costs to their customers.

As of June 3, the average national price per gallon of gasoline was $ 4.76, according to the AAA. Connecticut, which at one point rose 19 cents in a week, is a penny higher than the rest of the nation.

With even the largest companies feeling the impact of rising fuel costs, how has this shaken the economy in southeastern Connecticut?

“It’s awful,” said Will Mitchell, owner of Outdoor Property Services in Groton. “We were forced to raise our interest rates by 20% compared to last year.”

Mitchell said he had raised his minimum rate from $ 50 a year ago to $ 60 in 2022 as a result of fuel prices. To refuel his fleet of trucks, which are accompanied by a trailer, mower and various other pieces of equipment, he pays approximately $ 1,500 per pump per week. That figure was nearly $ 900 a year ago.

Mitchell is not alone.

Joshua’s Worldwide, a ground transportation and concierge service based in Gales Ferry, has nearly doubled its fuel costs. In approximately two months, Joshua’s spent $ 6,500 a week to replenish its fleet of 50 sedans, limousines and buses to more than $ 10,000.

“June, July, August, September are really the places where gas prices usually reach the roof,” said Joshua McKeon, chief operating officer. “And if we’re at $ 6 a gallon for diesel now, we’re in trouble.”

“Not just Joshua’s Worldwide: we as a community,” he added.

Just as Outdoor Property Services was forced to raise prices, Joshua introduced a fuel charge for each service. It started with a fee of 2%, but reached 3.5%. He is currently at 5% and while Joshua’s clientele understands the added fee, McKean wonders how far he will have to spend it.

“We’ve been lucky to have big business growth, but when that happens, our vehicles are moving and our vehicles need fuel,” McKean said. “It’s hard to find a balance because when is enough?”

Outdoor Property Services, on the other hand, left customers due to non-payment, while other former customers chose to mow their own lawns. He is grateful to those who remained around.

“Eighty percent of our customers have been hit, they understand the situation,” Mitchell said. “We are healthy, but that’s only because of the way we run our company.”

Mitchell’s landscaping business has taken its fair share of the blows to its profit margins, but Mitchell said he is debt-free and “treading water” for now. He even pays his employees more than a year ago. To do so, however, he is forced to make some decisions.

“I’m not going to do much extra,” Mitchell said. “I do not buy equipment that I do not absolutely need. Because I don’t know what will happen to the fuel next month. “

Before his busy season began, Mitchell said he had tried to buy a new tractor for $ 60,000, but was told he would not receive it for another four to five months, long after his business peak. Instead, he searched the Internet for one and found a 1983 model in western Connecticut for $ 15,000 – the same price it sold nearly 40 years ago.

Mitchell was recently asked to evaluate a five-year state property contract. Between the price of gasoline and the increased cost of fertilizers and grass seeds, he had difficulty figuring out a number.

“How the hell can I put a fuel number?” He asked.

Delivery was another headache for Mitchell. Only one of the four mowers he ordered at the beginning of the season arrived. He said he bought two of the last hedge trimmers he saw and was in the worst of times to find parts for his 2005 GMC truck fleet. He said he had to postpone a fence project by nearly six weeks. for a customer when four pieces of material did not arrive with the rest of the shipment.

“I’m almost grateful the mowers didn’t make it, because if they came in, I’d have to buy them,” Mitchell said. “And as it turns out, as there are more people mowing their own lawns or doing whatever they do, business is falling apart. My profit margins are declining and we are not expanding in the usual way.

“I don’t do that much, but I still do,” Mitchell added.

Chris Kahn, Sales Manager, New England Cycle Works Inc. in Groton, saw Mitchell’s nightmares unfold in his own shop. He had almost no lawn mowers in stock at his electrical equipment store, while shipping costs continued to rise.

“The biggest fluctuation we see is the transport fees from manufacturers to us,” Kahn said of the fees, which directly affect the price customers pay. “They went from $ 300 for some models to $ 700 for others.”

“Manufacturers have told us, like Kawasaki, that their delivery costs have increased by 240%,” he added.

Kahn said he had not seen a dramatic drop in sales, except for scooters, the most economical offer in the business.

People are still spending money and having fun as they want to have fun, said Kahn, which is a direct reflection of the New London County community, which has helped Mitchell’s business stay afloat and McKean reach new heights.

“If fuel continues to rise and we continue to raise prices, unfortunately they may be looking elsewhere,” McCain said. “But many of our customers have been loyal in the 28 years we’ve been in business. Nobody left us. If nothing else, we have won more customers thanks to the customer service and the ladies in the office who work day after day. The relationships we build are what save us. “

One key link is with local schools. McCain said Joshua’s Worldwide has an average of about 30 proms a week since schools celebrated high school in late spring. He said the company had booked more proms this year alone than in the three years before the pandemic, and had garnered 270 new five-star reviews on Google in the last calendar year.

“The community is behind the brand,” McCain said. “They know we have been able to overcome the pandemic. We were here. We donate a lot of money to local youth programs. We do a lot with art programs. We do a lot with golf events. We do a lot for society. “

Although the first week of June brings historically high fuel prices, McKeon begs everyone to stay strong.

“It’s all about being part of this great community,” he said. “Southeast Connecticut is a wonderful place for my children to grow up. This is a great place for business. Fuel sucks, but it is necessary. It’s time to just stick together and do the best we can to support each other. “

Mitchell is grateful for the business he has.

“We are blessed to have some super supportive clients,” he said. “We receive timely payments from 80% of them. We are happy to do what we do and that is all I can say. It is what it is.”

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