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Small businesses feel the crunch
With a plummeting dollar and home values combined with skyrocketing food and fuel costs, it's obvious that this is not the best of times for America's finances. This is not just bad news for investment bankers and anyone planning a vacation to Europe, as the ongoing financial crises have a direct personal impact on local businesses.
In Cenan's Bakery in Vienna's Danor Plaza, the price of flour has gone up 300 percent, compared to this time last year.
“A few months ago I had to raise my prices, for the first time in three years,” said bakery owner Cenan Pulak. With flour costs so high, Pulak must make every loaf of bread count. To cut down on costly leftovers, he now makes less bread and sometimes he runs out, which doesn't make his customers happy. However the market doesn't leave him much choice.
“Now a 50 pound bag of wheat flour costs $28. It used to be $9,” Pulak said.
At the Old Brogue in Great Falls, owner Mike Kearney is also facing rising costs across the board.
“Vodka, beer, anything with grain in it, seafood, it's all gone through the roof,” Kearney said.
As wholesale prices rise, business owners like Kearney eventually have to pass the costs on to customers, whose wallets are already impacted by their own rising costs.
“We have to find a balance where it's still a value for the customer to come out. Otherwise they stay at home,” Kearney said.
As an employer, Kearney has some other long-term concerns that are shared by small business owners all over the county.
“Sixty people work for me. Only about 20 live in Great Falls.”
The majority of Kearney's employees live relatively far, in places like Burke or Centreville.
“A good waiter makes about $180 in a night ... and might have to pay around $60 to fill up his gas tank. How long is that drive going to be worth it?” Kearney said.
The evidence of hard times ahead for Fairfax's small businesses isn't just anecdotal. According to Fairfax County's April numbers, retail sales tax receipts have fallen for the last three month, and are currently down more than 3 percent from last year. If that trend continues, people like Kearney will have less and less money to spend on even more expensive fuel and grain.
Small businesses outside the food service world are affected as well. According to Fairfax Economic Development Authority President Gerry Gordon, many of the less visible small businesses in Fairfax County are government contractors, often working as subcontractors to larger firms like SAIC. These businesses are hit by rising fuel costs like everyone else, but their futures also have a special relationship to the current U.S presidential race.
“When there's political changes, it always trickles down to small contractors,” Gordon said.
New administrations typically shift money to new areas, and thus new contractors, a circumstance likely to be keenly felt in Fairfax, according to Gordon. However, in this case, the county's weakness may also be its strength.
“We have always come out of recessions faster than any other community in this region. ... Congress has a tendency to spend its way out of recessions,” Gordon said.
email the reporter at mtayloe@timespapers.com
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