August 17, 2022
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The Day – Gas-dependent businesses fueled by community as prices rise

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As gas prices are on the rise and show no signs of slowing down as summer nears, businesses are passing on some of the increased cost to their customers.

As of June 3, the national average price for a gallon of gasoline was $4.76, according to AAA. Connecticut, which at one point saw a 19-cent increase in a single week, sits a penny higher than the rest of the nation.

With even the biggest of businesses feeling the impact of the rise in fuel costs, how has that shaken up the economy in southeastern Connecticut?

“It’s horrible,” said Will Mitchell, owner of Outdoor Property Services in Groton. “We’ve been forced to raise our rates by 20% over last year.”

Mitchell said he’s raised his minimum rate from $50 a year ago to $60 in 2022 as a direct result of fuel prices. To fuel up his fleet of trucks, which are all accompanied by a trailer, a lawn mower and various other pieces of equipment, he pays roughly $1,500 at the pump per week. That number was near $900 a year ago.

Mitchell is not alone.

Joshua’s Worldwide, a ground transportation and concierge service headquartered in Gales Ferry, has nearly doubled its fuel expenses. In roughly two months’ time, Joshua’s went from spending $6,500 per week to fill up its fleet of 50 sedans, limousines and buses to over $10,000.

“June, July, August, September are really where gas prices normally go through the roof,” said Joshua McKeon, the director of operations. “And if we’re at $6 a gallon now for diesel, we’re in trouble.”

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

Just as Outdoor Property Services was forced to raise prices, Joshua’s implemented a fuel surcharge on every service. It started at a 2% fee, but went to 3.5%. It currently sits at 5%, and while Joshua’s clientele has been understanding of the added charge, McKeon wonders how far he will have to push it.

“We’ve been fortunate to have a large increase in business, but when that happens our vehicles are moving and our vehicles need fuel,” McKeon said. “It’s difficult to find a balance because when is enough enough?”

Outdoor Property Services, on the other hand, has dropped customers due to nonpayment, while other former clients have opted to mow their own lawns. He’s grateful for those who have stuck around.

“Eighty percent of our customers rolled with the punches, understood the situation,” Mitchell said. “We’re healthy, but that’s only because of the way we’ve managed our company.”

Mitchell’s landscaping business has taken its fair share of hits in its profit margins, but Mitchell said it is debt free and “treading water” for the time being. He’s even paying his employees more than he did a year ago. In order to do so, however, he’s been forced to make some decisions.

“I’m not going to do a lot of extra things,” Mitchell said. “I’m not buying equipment that I don’t absolutely need. Because I don’t know what’s going to happen with fuel next month.”

Before his busy season began, Mitchell said he attempted to purchase a new $60,000 tractor, but was told he would not get it for another four to five months, well after his peak in business. Instead, he scrounged on the internet for one and found a 1983 model in western Connecticut for $15,000 — the same price point it sold for nearly 40 years ago.

Recently, Mitchell was asked to give an estimate for a five-year contract on a government property. Between the cost of gasoline and the increased costs of fertilizer and grass seed, he’s had a difficult time coming up with a number.

“How in the hell can I put a number on fuel?” he asked.

Shipping has been another headache for Mitchell. Only one of the four lawnmowers he ordered at the beginning of the season arrived. He said he bought two of the last hedge trimmers he saw and is having the worst time of finding parts for his fleet of 2005 GMC trucks. He said he had to delay a fence project nearly six weeks for a client when four pieces of material didn’t arrive with the rest of the shipment.

“I’m almost thankful that the lawn mowers didn’t make it in because if they’d come in, I’d be obligated to purchase them,” Mitchell said. “And as it turned out, because there’s more people mowing their own lawns or doing whatever they’re doing, business is down. My profit margins are down and we’re not expanding the way we normally would.”

“I’m not making as much, but I’m still making,” Mitchell added.

Chris Cann, sales manager of New England Cycle Works Inc. in Groton, has seen Mitchell’s nightmares play out in his own store. He barely has had ride-on lawn mowers in stock at his power equipment store, while shipping costs keep climbing.

“The greatest fluctuation we’re seeing is freight charges from the manufacturers into us,” Cann said of the charges, which directly impact the price customers pay. “They’ve gone from $300 on some models to $700 on others.”

“Manufacturers told us, like Kawasaki, that their cost of shipping has gone up 240%,” he added.

Cann said he has not seen a dramatic dip in sales, besides in scooters, the business’s most fuel-efficient offering.

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

“If fuel continues to go up and we continue to hike the prices up, unfortunately they may look somewhere else,” McKeon said. “But, a lot of our clients have been loyal over the 28 years that we’ve been in business. Nobody’s left us. If anything we’ve gained more clients because of our customer service and the ladies in the office that work day in and day out. The relationships that we build is what’s saving us.”

One key relationship has been with local schools. McKeon said Joshua’s Worldwide is averaging about 30 proms per week as schools celebrated their senior classes in the late spring. He said the company booked more proms this year alone than in the three years preceding the pandemic, and has accumulated 270 new five-star reviews on Google in the last calendar year.

“The community stands behind the brand,” McKeon said. “They know that we made it through the pandemic. We were here. We donate a lot of money to the local youth programs. We do a lot with the arts programs. We do a lot with golf events. We do a lot for the community.”

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

“It all ties back to being a part of this great community,” he said. “Southeastern Connecticut is a wonderful place for my kids to grow up. It’s a wonderful place for business. Fuel sucks, but it’s a necessity. It’s time that we just continue to stick together and do the best that we can to all co-support each other.”

Mitchell is thankful for the business he has.

“We are blessed to really have some super supportive customers,” he said. “We get paid on time by 80% of them. We’re happy doing what we’re doing and that’s all I can say. It is what it is.”





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