HIGHS & LOWS SKY-HIGH GAS PRICES ARE A BENEFIT FOR SOME BUSINESSES, BUT A CURSE FOR OTHERS.

Byline: Brent Hopkins Staff Writer

Businesses that rely on gasoline have been hammered hard for months, with even giants like Wal-Mart expressing concern that if left unchecked, price hikes could endanger the burgeoning economic recovery. No one admits to enjoying high prices, which have set records throughout the year.

But while some companies throw up their hands in frustration, others have found ways to benefit from soaring prices at the pump.

``You drive by so many gas stations, then hear it on the news all the time, that it has an impact on how consumers shop,'' said Scott Krugman, a spokesman for the National Retail Federation. ``When you see it go over the $2 mark, it just triggers something. Something I do every day costs a lot more than it used to, I'm spending more, I need to watch my budget.''

That budget watching has been a great boon to folks like Scott McAfee, who runs the family-owned Don's Bikes of Rialto. As a competitive bicyclist, he regularly climbs on his Trek carbon fiber road bike to make the 20-mile one-way commute to his shop. Now, he's finding more like-minded commuters who've stashed their sport utility vehicles in favor of a gas-free ride, which has pitched into a sales increase in recent months.

``Prices are so astronomical right now, people who'd typically drive are looking for alternatives like bikes and scooters,'' he said. ``It's a big topic of discussion right now, so you hear people comment a lot. The commuter segment will definitely expand, and if it gets worse, more and more people will look at this as a serious option.''

According to a recent study by workplace issues experts Challenger Gray & Christmas, McAfee's industry, along with footwear manufacturers, and food delivery services, among others, all stand to benefit as fuel prices soar.

``The benefit comes as people begin to think about changing their lifestyles and how they try to avoid too much gas,'' said John Challenger, chief executive officer of the Chicago-based company. ``They stop driving out to the far-away mall or to the specialty shop on the other side of the city. They don't go on shopping junkets in the same way, so local retailers get a benefit as people try to stay close in their area.''

At Chatsworth-based Currie Technologies, an electric bike and scooter manufacturer, $2 gas isn't the killer it is to most businesses. Though chairman and CEO Malcolm Currie doesn't like paying more to gas up his car on the way to work, he's betting it'll help his bottom line. His employees are already beginning to opt to scoot into work, a trend he think will continue for others if prices stay at their present height.

``It should help,'' he chuckled. ``When prices go up to $3.50 a gallon, it'll be even better. It's increased interest, but prices have gone up so fast, we can't correlate it with sales yet. I'm sure they'll come, though.''

With fewer drivers opting to venture out, delivery service is up dramatically in Southern California for online grocer Vons.com. Though the service ascribes the rise to a number of automotive factors, including frustration with traffic and lack of time, shoppers have proved willing to pay delivery fees, ranging from $4.95 to $9.95, in order to save time and money when driving.

While Challenger's survey suggests that outlet malls may suffer in time as consumers eschew driving long distances, marketing directors at malls in Camarillo, Cabazon and Ontario reported they haven't encountered problems yet. In past gas crunches, they reported that lost long-distance traffic had been made up for by increased local visits.

But while some companies reap the benefits, others feel the pain each time prices rise. Angela Lyons, owner of Schonuf Mobil Animal Grooming in Chino Hills, gets it from both sides. Not only does she find her clients watching their budgets and paying for fewer pet groomings, she's also got the gas bills for a fleet of 50 Ford Econoline vans that get 11 miles to the gallon. She's considering a fuel surcharge to cover the added transit costs and has asked her crews to stop using their gasoline-powered generators to power their instruments. They now plug their dryers and trimmers directly into the consumer's electric outlets, allowing her to save a bit each trip.

``In an eight-hour day, we might consume an extra 4 gallons of fuel with the generators,'' she said. ``At $2.40 a gallon, seven days a week with 50 vehicles, it really adds up. We quit using gas and the customer picks up the electric bill. We don't mean to do it that way, but otherwise, we'd have to raise our prices more.''

The decision to increase prices can be a perilous one, as business owners risk losing clients who are either too strapped to pay for the added cost or apt to seek out a cheaper rate elsewhere. Though he was reluctant to tack more charges onto his bills, Larry Boyd, owner of Boyd's Gardening Service in Northridge, felt he had no choice. With two V-8 powered trucks that log 500 miles per week, leaf blowers and heavy duty lawn mowers to fill up, he's seen his gas bills increase 40 percent in recent months.

``I sent notices to my customers to let them know that we're going to initiate a $20 gasoline surcharge,'' Boyd said. ``If prices fall back down to $1.69 a gallon, I'll eliminate the charge, but I haven't had any negative feedback so far.''

Other businesses make accommodations in subtle ways. At A&G Pest Control Services in Glendora, owner George Iglesias has begun raising prices a few dollars on new clients in an attempt to defray his rising costs for fuel. With four Ford trucks outfitted with water tanks that hold more than 30 gallons, ladder racks and tool boxes, his drivers burn through $30 of gas every other day, pinching him in a competitive industry.

``When we used to give an estimate, we'd look at it as 8 percent goes to pesticide, 25 percent goes to wages and so on,'' Iglesias said. ``Gas was never really thought of as an expense before, but now we definitely do. Now, I'm going to have to raise prices a few dollars.''

While Iglesias' price hikes will affect relatively few consumers, others' pump pain will resonate much further in the supply chain. Fuel bills and related costs will cut into Southwest Traders Inc.'s earnings by $400,000 this year, forcing Ken Smith, president of the Temecula-based food wholesaler to tack on surcharges for everything from straws to frozen meat and ice cream. His tractor trailers run 45 routes throughout the state, supplying restaurants and food manufacturers, and the bills they rack up will be felt will be felt in mugs of coffee and pints of pistachio.

``What it costs us to operate has to be passed along to our customers, then it has to be passed along to consumers,'' Smith said. ``So you'll be paying more for a cup of coffee or a smoothie - that's just the reality of buying things in California.''

Brent Hopkins, [phone]

brent.hopkins(at)dailynews.com

CAPTION(S):

2 photos, 2 boxes

Photo:

(1 -- color) Scott McAfee, who owns and operates Don's Bikes of Rialto, has seen a rise in interest in bikes since gasoline prices have increased. He said some commuters have stashed their SUVs and are using bikes instead.

Jennifer Cappuccio/Staff Photographer

(2 -- color) Gardening service owner Larry Boyd feels the pinch of higher gas prices when he refuels the pickup trucks he uses. He's told his customers that he'll have to start adding a gas surcharge.

Evan Yee/Staff Photographer

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