By and  on September 29, 2008

ATLANTA — As if the litany of U.S. economic woes wasn’t bad enough, retailers in parts of the Southeast are dealing with gas shortages worsened by panic buying after Hurricane Ike restricted oil refinery production on the Gulf Coast.

Major metropolitan areas, including Atlanta, Nashville and Knoxville, Tenn., are enduring closed gas stations, long lines for fuel and rising prices.

Herman Heinle, president, Gus Mayer, a better specialty store in Birmingham, Ala., and Nashville, said the situation was especially critical in Nashville, where his “store definitely suffered…because of slow traffic.”

Marigail Mathis, owner of a namesake specialty store in Florence, Ala., estimated one-third of pumps in her area were empty, but was more concerned about market trips than sales.

“I have to make a buying trip to AmericasMart [in Atlanta] in October, and I’ve called several people there today, worried that I might get stuck there without gas,” she said. “I heard everything from ‘Media reports are overblown,’ to a sales rep who had grave concerns.”

AmericasMart said in a statement, “We are two weeks away from market [Oct. 11-14] and are confident that Atlanta will have its full gas supply back.”

As many as 50 to 80 percent of gas stations in the Atlanta region were caught in the squeeze, said Tex Pitfield, president and chief executive officer of Saraguay, a gasoline supplier. A gallon of regular was selling for as much as $4.59 in Atlanta, $4.28 in Charlotte, N.C., and $4.15 in Birmingham, compared with a national average of $3.64.

The U.S. Department of Energy said last week that five Gulf Coast oil refineries with a total production capacity of 1.2 million barrels a day had been shut since Hurricane Ike idled a total of 14 refineries two weeks ago. The Gulf accounts for about 20 percent of the nation’s petroleum refining capacity.

“Demand keeps going up, and supplies keep going down,” said Pitfield, who attributed much of the problem to panic buying. ”We’re actually past the point of panic and now we’re in meltdown.”

Although many retailers said customer volume was holding firm, John Heavener, president of the Georgia Retail Association, with 1,300 store locations, predicted that sales at department and specialty stores could suffer steep drops.

“They may be able to make it up by holiday, but it’s an already bad retail scene nationally, and online retailers have eaten away at holiday sales each year,” he said.

In Atlanta, Melissa Murdock, owner of Sandpiper, a better specialty store, said special events had kept traffic up, despite grumblings about gas and the economy from consumers.

“We were so cautious about this fall in general that we increased our events, including trunk shows, from one every two months to one every three weeks, she said. “On less inventory, we’re working harder, and we may manage a sales increase this year. We’re buying only the best of the best.”

To Read the Full Article
SUBSCRIBE NOW

Tap into our Global Network

Of Industry Leaders and Designers

load comments
blog comments powered by Disqus