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  • AUTUMN CRUZ / acruz@sacbee.com

    Richard Reeves, a delivery man for Buckhorn Grill, buckles into the 90-mile-per-gallon Bajaj, a three-wheeler made in India that cuts gas costs.

  • AUTUMN CRUZ / acruz@sacbee.com

    While dropping off meals downtown, it attracts a lot of attention in these days of $100 tank fill-ups.

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It's belt-tightening time as firms that deliver confront fuel costs

Published: Wednesday, Aug. 6, 2008 - 12:00 am | Page 10B

When Sacramento's Buckhorn Grill purchased a Bajaj, a three-wheeled Indian-made vehicle, patrons thought it looked cute.

As gas prices climbed, the Bajaj just started to look smart: 90 mpg while being cute, to boot.

Higher gas prices mean smaller profit margins for businesses, especially the small businesses that depend on gas to do what they do: deliver.

According to the Energy Information Administration, regular-grade gasoline in California is an average of $4.20 per gallon this year, a figure which is well more than $1 per gallon above the 2007 average price.

Some Sacramento businesses, such as florists and restaurants, are working to deliver while not drastically increasing costs for customers. But a few can expect to come close to disaster as they have during past fuel price spikes, said Dan Ortwerth, transportation analyst with Edward Jones.

"Gas prices will cause a lot of pain, and high fuel cost is a reality we will see for a while," said Ortwerth. "The important lesson in this is that usually the best answer to short-term problems is a long-term solution … people need to look for any opportunity to cut fuel usage."

And that's what some businesses are doing.

Claudia Fitzgerald owns Fresh Cut Flowers on K Street. She went from paying $500 a month to paying $800 a month fueling her large cargo van.

To control driving costs, Fitzgerald is more frequently using Teleflora, a service that transfers orders to shops near the customer. A lot of fuel is used to get flowers from a field to a customer's doorstep, and that adds up.

"It feels weird, wiring orders to places that I would usually think are pretty close, like Elk Grove," said Fitzgerald. "But we are having to do that more and more often."

Michele Porter, owner of G. Rossi & Co. Florists on Seventh Street, said she is making sure that all her deliveries "make sense."

"We've become wise and conscious of where we are going, we don't need to go to the same area twice in a day," she said. "We need to be more efficient with our deliveries, and we are working harder to do better."

Both florists say they trying to avoid passing on costs to customers.

Bruce Lam and Jimmy Thai of Toppingz Pizza on K Street said they have also opted to cope with costs without raising prices.

They opened in September and fear that raising their prices will narrow their still-developing customer base.

"Of course we are affected by gas, we make deliveries and the jump in flour prices has hurt us," Thai said. "A lot of people we know in the pizza delivery business just have to raise their prices, though."

Omar Navas, who delivers for Extreme Pizza in Sacramento, said that when he doesn't make tips, his paycheck ends up in his gas tank.

"It used to cost me $20 to fill up my Honda, and now it costs me $45," said Navas. "I thought I was smart to not have a gas guzzler, but it's not good enough."

The Bajaj looks ever smarter. The delivery charge that Buckhorn adds to a customer's bill goes straight to the driver.

Mark Perkinson, general manager of Buckhorn Grill, said the price of foodstuffs has also gone up and he, too, does not want customers to pay the difference.

"We can't pass that cost along to my customers," Perkinson said. "We don't charge people for a plate when they come into a restaurant, so we can't put this extra money on them."


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