honoluluadvertiser.com

Sponsored by:

Comment, blog & share photos

Log in | Become a member
The Honolulu Advertiser
Posted on: Wednesday, September 14, 2005

Gas prices curb customers, some say

By Dan Nakaso
Advertiser Staff Writer

spacer

Bill Chan can measure the effects of O'ahu's rising gasoline prices by the empty tables at his restaurants in Kalihi and Mili-lani.

Ever since the price of gas starting approaching $3 a gallon in Honolulu, Chan has seen a commensurate drop in customers at his Tasty Chop Suey in Kalihi and Mililani Restaurant.

"Parking lot is empty," Chan said. "Even after 9/11, we were still OK. But this is real bad. It's dead. It's very, very bad."

Businesses throughout O'ahu that have little or no direct connection to fuel prices started seeing sales fall off a couple of weeks ago and reach new lows just as gas started selling for $3 a gallon last week.

For them, the effects of rising gasoline prices aren't measured in increased fuel costs but in missing revenue from customers presumably spending more on gas and less on frills like shave ice or a meal out.

Several businesses believe — and hope — that their revenue decline of the past two weeks is merely the result of the annual fall season when the tourist trade slows, kids go back to school and their parents adjust to new routines.

But Chan is adamant that the 30 percent drop-off in business he's seen in Mililani and the 40 percent decline in Kalihi is directly tied to rising gas prices.

"Normally when everybody goes back to school, you drop a little bit, 10 percent — that's normal," Chan said. "But now, nobody come. It's bad."

His brother, Richard, the owner of the I Love Country Cafe chain of restaurants, also has seen revenue fall by 30 percent in recent weeks.

"We expect that when it's back to school time, everything will be slow," Richard Chan said. "But we're getting a double whammy now. You can really feel people holding back because of the gas."

When gas prices jumped to $3 a gallon, Richard Chan started offering $3 and $4 "grab and go" sandwiches and mini-salads — about half of the cost of a typical I Love Country Cafe entree.

He also sped up plans to install a Chinese takeout window inside the Pi'ikoi Street I Luv Country Cafe.

The original idea was to start selling Chinese food in December, but now Chan hopes to begin his new operation in a month or so.

"Times are hard so you have to think of ways to attract more customers," he said.

Several other businesses are waiting a week or two before declaring whether their slowing sales are normal — or the result of customers cutting them out to pay for higher gasoline costs.

When revenue dropped about 30 percent at Dave & Buster's two weeks ago, general manager Matt Luckett didn't worry.

"During this time of year, usually a week or two after school starts, we see a significant decline in business," Luckett said. "That's normal for us. But can I also attribute that to rising gas prices? It's too early to tell. Gas prices, with the way they've jumped up, I cannot be so certain that it's not going to be a factor in the next week or two. It would be very hard to say that it's not going to be some sort of factor soon. It has to be."

Matsumoto Shave Ice in Hale'iwa also saw sales drop 30 percent in the past few weeks — as usual.

Like other business owners, Stanley Matsumoto hopes it's just part of the annual post-summer lull.

"It's hard to say because business always drops off after Labor Day," Matsumoto said. "The next two weeks will tell."

At the Ice Palace in Salt Lake, manager Corinne Beck eyed the lone customer on the rink yesterday morning, following the past few busy weeks of summer that were filled with parties and skaters.

"It's normal," Beck said. "Right now there's only one person on the ice, but we have parties reserved for weeks. We may see a real drop but we haven't run into problems quite yet."

Starbucks, which offers human fuel, has proven immune to the vagaries of seasons or gas prices while its neighbor, Jamba Juice, has seen sales fluctuate between summer and fall, said Sherri Rigg, spokeswoman for both companies.

"Jamba Juice ebbs and flows with people changing routines and getting back to school," Rigg said. With Starbucks, she said, "We have very loyal customers and we're just part of their daily routine. Starbucks has been pretty solid."

Debbie Iwakami isn't so lucky.

Sales at her Kokonut's Shave Ice & Snacks in the Koko Marina Shopping Center have plummeted 30 percent in the past two weeks.

Last weekend, when she hoped for a bump in business, sales instead were down.

"Things are different," Iwakami said. "They're really, really different."

Her biggest hope is that gas prices drop and customers return.

"Prices have to go back down," Iwakami said, "so people can smile again."

Reach Dan Nakaso at dnakaso@honoluluadvertiser.com.