Record Diesel Prices that have hit Washington since President Donald Trump ordered military strikes against Iran are starting to impact prices in grocery stores, according to several food stores and suppliers.
Here is how the price of gas has increased, according to AAA:
Thursday: $6.52 (WA State Record)
Last Week: $6:21
Last Month: $4.89
Last Year: $4.41
Thursday’s National Average: $5.38
Diesel is an underpin of the economy, used for shipping goods throughout the country. Yousef Shulman, the co-owner of Leschi Market, says he’s seen his supplier tack on fuel delivery fees and prices change on products 150 times each week.
“It does hurt business, and for a local store it’s hard,” Shulman said, “The industry is the margins have shrunk considerably.”
Sometimes fuel charges are per mile, sometimes they’re flat. Some products come in at a manageable $5; other times, it’s $200. If the delivery truck makes several stops, Shulman splits it with the others, but if he’s the only stop, he has to pay it all on his own.
“I will not know that until that delivery arrives.”
Shulman describes the compounding price of diesel cascades down the supply chain—a manufacturer gets a price increase on their raw materials because of fuel costs, that businesses passes that on to its distributor, who also has to pays the higher shipping costs to get it from the manufacturer to the distributor, the distributor takes those price increases, and raises the price they charge, then the cost to get it to a store like Yousef’s also cuts into his bottom line. Because taxes are a percentage, the tax bill also increases exponentially as the cost does too.
"It’s a spiraling effect," Shulman says, “Members say, ‘oh it only went up by one percent,’ but, it really, by the time it gets to us, it’s like five, because everybody’s paying it more along the way.”
Meat and produce are the most sensitive to price changes because, in order to ensure freshness, near-daily deliveries are required. Dan Varroney, an economic consultant and CEO of Potomac Core, says small businesses struggle with these fast increases in price more than larger box stores.
“This is going to be very difficult for small businesses, and they’re going to have a very difficult time passing on those higher prices,” Varroney said.
Varroney expects that because suppliers and manufacturers have already paid for the product in their warehouse or that’s incoming, the prices will shoot up like a rocket and fall slowly like a feather.
“Let’s say the war ends in a week or two. Then, in six to 12 weeks, we’ll start to see prices come down.” Varroney said.
But with no end in sight, businesses like Shulman’s are holding on as long as they can.
"Try to support your local businesses in order to help them sustain. and stay alive." Shulman said.
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