BOSTON, MA – Spikes in gas prices have already taken a toll on small business owners trying to bounce back from the pandemic, inflation, labor shortages, and other challenges.
In fact, Alignable’s Gas Price Poll of 6,439 small business owners surveyed from 3/13/22 to 3/27/22 showed that 68% say gas price spikes have had a “very significant” negative effect on their business recovery.
Not surprisingly, some industries are much more affected than others, with small business owners in sectors including transportation, cleaning services, journalism, beauty salons, and plumbing feeling the most financial pressure.
Given their dependence on fuel, a whopping 91% of small business owners in the transportation industry (Uber and Lyft drivers, truckers, taxi or limo company owners, etc.) have been highly impacted by gas prices going up.
And based on their extreme fuel needs, 67% of the business owners in aviation or aerospace reported an increase in financial hardship, as well.
Beyond Transportation: Remaining Top 10 In The Hot Seat
Here’s the full rundown on the percentages of SMBs in other categories that make up the Top 10 industries struggling with increased gas prices.
- 90% of cleaning services
- 86% of news media outlets
- 79% of beauty salons
- 78% of plumbers
- 73% of repair shop owners
- 71% of manufacturers
- 66% of restaurants
- 64% of retailers.
While gas prices were on the rise earlier this year, more industries were affected after the U.S. sanctions on Russian oil and gas forced prices to skyrocket to new heights.
Cleaning (90%) and plumbing (78%) services rely on their workers driving — often long distances to and from clients’ homes or corporate facilities — all day long, every day, even on weekends, in many cases.
Adding up the increased operational expenses from all of that driving, over the course of a week, would be devastating to the margins of these types of small businesses.
Salons, Restaurants, Retailers & Repair Shops
Beauty salons, restaurants, retailers, and repair shop owners have been affected a few ways by the gas price spikes.
First off, the increased trucking expenses of goods small businesses in all of these sectors need to sell are all passed onto them.
And for restaurants that have a lot of delivery business (which also went up during the pandemic), the added fuel expenses incurred by their drivers are having a negative impact on their businesses, as well.
Considering that 83% of restaurant owners said they were still recovering in early March, just imagine how much extra gas expenses are setting them back in their recovery.
Finally, for all of these industries, higher gas prices also mean fewer customers spending the extra money it takes to drive to their establishments for a haircut, a meal, or a new dress.
And repair shops could see less business as gas prices remain high, because consumers are cutting back on unnecessary trips, reducing the wear and tear on their cars.
Looking at other industries, the only categories that were below the 60% mark included professions that rely on a higher percentage of “desk work” or remote work, such as lawyers (56%), accountants and financial planners (58%), and those in marketing and advertising (57%).
All Demographic Groups Struggle With Gas Prices
Similar to other charts for other polls, we see that minority-owned businesses are having more challenges with the increase in gas prices, as nearly three out of four (74%) reported “very significant” negative impact on their business growth.
However, veterans aren’t far behind with 70% of those businesses struggling with higher gas prices.
And leaders of 63% of women-owned and 66% of nonminority-owned companies also voiced consternation over the gas prices and their effect on their margins, overall financial health, and recovery.
What’s Happening In Key States or Provinces?
A few geographic hot spots emerged during this poll, but numbers are quite high across many states and provinces.
That said, Michigan, Texas, Arizona, and Georgia top the list of states where more small businesses are feeling the negative effects of gas price spikes.
Some 78% of SMBs in Michigan complained that the gas prices are already hurting their recoveries. To put this in context, Michigan is often at or near the top of our list for small business rent delinquency and for states having the hardest time recovering. So, yet again, Michigan is atop another list of small businesses struggling, which must be frustrating for that state’s small business residents.
Right after Michigan, you can see that 74% of Texans running a small business say they’ve been hurt by gas prices, with Arizona (72%) and Georgia (72%) right behind Texas.
Many states have at least 60% of small businesses pointing to gas prices as a major stumbling block on their road to recovery. These include California (68%), Virginia (65%), North Carolina (64%), Ohio (63%), Pennsylvania (63%), Illinois (62%), and Massachusetts (61%). Some 60% of small businesses in Florida, New York, and Washington State are struggling with gas prices, too.
The state with the lowest incidence of gas spike issues is Colorado, with only 47%.
More Canadian Insights
Our friends to the north are having similar issues. Overall, 64% of Canadian small businesses said the negative impact of the recent gas price spikes is “very significant,” compared to 68% in the U.S.
AB tops the Canadian chart with 70% of its small businesses struggling with gas prices. Ontario comes in at 64%, and BC is around 61%.
If you need any information about other states, provinces or industries, please reach out to me at [email protected]. For other poll results, go to the Alignable Research Center.
Or to take this week’s Road To Recovery Poll, go here.
ABOUT THE ALIGNABLE RESEARCH CENTER
Alignable is the largest online referral network for small businesses with 7 million+ members across North America.
We established our research center in early March 2020, to track and report the impact of the Coronavirus on small businesses, and to monitor recovery efforts, informing the media, policymakers, and our members.
Comments (1-10)
Commented on Mar 27th, 2022
Being in both gasoline retailing and towing & road service I see first hand the negative impact of this issue. I purchase fuel weekly for my service station. My pricing changes daily so I try to watch WTI prices so I can buy on the low and pass it on to my loyal clients. After 60 years at my location I feel I owe my clients fair pricing and explanations. This is not happened overnight. The closing of the XL pipeline and cancellation of off shore and federal
Land drilling and the anti fossil fuel sentiment from Washington has a big responsibility for this jump in prices. The size of the spikes is the scary thing I see. 40 cent jumps a day in diesel is not been seen ever. On the trucking side we have had to add fuel surcharges to our calls. I don’t see this ending soon but watch for short supply to be coming this summer.