0601EconomyHear economist Roger Tutterow talk about the impact of fuel costs on consumers
In large letters along the Corner Drugs van is "Free Delivery."
In downtown Gainesville at Martin Furniture, not charging for delivery is a service that began when the store opened in 1945.
Local business owners such as Cleve Brown and Ben Martin say that free delivery is a service that separates them from chain stores. But it was an idea conceived when gasoline was less than a tenth of its current price.
"I’m still offering free delivery, but I don’t know why," said Martin, who owns the family furniture store. "I’m one of the last holdouts, but free delivery is still closing sales for us. But it is putting a hurting on our bottom line."
Brown, who owns Corner Drugs on Thompson Bridge Road, now limits his free delivery area, but said the service is in demand.
"Our delivery area has gotten smaller," Brown said. "We can’t deliver way out without an additional charge."
He said he has always had a charge, but he has had to enforce it more since gas prices have gone up.
Brown said trips are not as frequent and customers understand that delivery is not instant."We’re not like a pizza delivery business. We can’t run to South Hall three times a day," he said.
But the pharmacist said that independents are competitive with chain drug stores and are often lower in price.
Martin said he offers the free delivery service outside of Hall County when he is able to combine trips in the same direction.
"Obviously, I can’t afford to deliver an end table to Blairsville," he said. "If somebody wants a larger order, a 50- or 60-mile delivery becomes more affordable."
Martin said on the other end of his business, his furniture suppliers are adding fuel surcharges on freight deliveries.
"We had negotiated guaranteed freight rates, but they have fuel surcharges to make up for it. Freight rates are going up significantly," Martin said.
He said that the cost increase has not just been because of fuel. One bedding manufacturer recently implemented a 14 percent increase because of the price of steel used in the inner springs of a mattress and latex foam, which includes a petroleum derivative.
Roger Tutterow, a Mercer University economist, said Georgia is a state where transportation has a major role.
"We have a good number of manufactured goods getting shipped out of state," Tutterow said. "We have a good concentration of trucking entities in this part of the country, so the high price of diesel fuel is certainly putting some pressure on those employers."
Tutterow said consumers are paying at both ends. "We tend to put a lot on $4 gasoline, because consumers see it every day. The sticker shock puts a lot more emphasis on their consumer confidence," he said. "But we tend to forget that businesses face the higher transportation costs and it’s certainly putting pressure on anyone that manufactures, distributes or wholesales manufactured products."