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The Honolulu Advertiser
Posted on: Friday, November 4, 2005

Gas price cuts may boost spending

 •  Ethanol may affect gas prices

By Dan Nakaso
Advertiser Staff Writer

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Customers have been spending more on things like plate lunches in the past two weeks as the price of gasoline on O'ahu has fallen below $3 a gallon.

The extra money that drivers had been paying to fill up their tanks now seems to be flowing back into many O'ahu businesses that had seen revenue plummet after the country's first gas cap law went into effect in Hawai'i Sept. 1.

"Our sales have been stable for the first time since all of this started," said K.P. Young, the owner of the Crack Seed Store on Kokohead Avenue, which saw business drop 10 to 15 percent shortly after the cap took effect. "We're almost back to normal."

Crack seed customers from as far away as Mililani and Waipahu had stayed away in the six weeks that the price of regular gasoline jumped above $3 a gallon. But last week, Young began seeing them back in his store.

"They disappeared for a while but I guess now it's easier for them to travel long distances," Young said.

Businesses with little or no direct connection to fuel prices had watched sales drop since September as the average retail price on O'ahu for regular rose to a high of $3.59 a gallon.

"Sales have definitely gotten better since last week, compared to when the gas cap went into effect," said Rick Samalino, manager of the Tsukenjo Lunch House on Cooke Street, which saw sales drop by about 15 percent soon after the cap took effect.

Stanley Matsumoto, the owner of Matsumoto Shave Ice in Haleiwa, was among business owners who believed his recent 5 percent drop in sales was merely part of the slow off-season for the North Shore.

"But it's definitely getting better," Matsumoto said, "and we seem to be getting back to normal."

Dave & Buster's appeared to be headed for an expected 30 percent drop in revenue after summer.

Instead, business was up 10 percent over projections for September and "October has been just as strong," said general manager Matt Luckett.

In an odd twist, Luckett believes Dave & Buster's might have benefited from high gas prices.

Because of the restaurant and arcade's proximity to downtown, Ala Moana Center and the Victoria Ward complex of shops, Luckett speculates that many customers visited Dave & Buster's because they could drive a short distance after work — or shop before or after spending time at Dave & Buster's.

"Businesses that have been affected more are probably farther off of the beaten path," Luckett said. "We're convenient. Maybe we've seen an increase in business because people don't want to drive too far away. If that's what it is, I'll take it."

Luckett commutes to work from Kane'ohe in a 2004 Ford Expedition SUV, which now costs $55 to $60 to fill up with regular.

But at the high point of the last six weeks, Luckett once paid as much as $97 for a tank of regular.

"I drive a big old gas guzzler SUV," Luckett said. "So I'm happy gas prices have come down and I think a lot of our customers are, too."

Others like Debbie Iwakami, the owner of Kokonut's Shave Ice & Snacks in Hawai'i Kai, continue to struggle.

"Right now, we're still down 30 to 40 percent," Iwakami said.

Sales at Richard Chan's chain of I Luv Country restaurants have risen, but business is still down about 10 percent overall.

"I think people have gotten used to driving less," Chan said. "I see bigger crowds — families and co-workers — all coming in together at the same time. I see more carpooling and people conserving energy."

Rather than hope for business to bounce back on its own, Chan began offering $3 and $4 "grab and go" sandwiches and mini-salads after the gas cap went into effect.

"We have to do something," Chan said. "Because of this gas situation, people have learned to tighten up their spending."

Reach Dan Nakaso at dnakaso@honoluluadvertiser.com.