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High Gas Prices Taking Large Slice of Profits

Pizza guy 2Agawam, Mass. (WGGB) — It’s like a broken record – gasoline prices up again. Here in Massachusetts the price of a gallon of regular has risen another 4 cents – averaging about $3.72.

It’s not only impacting household budgets, it’s also cutting into the profits of small businesses.

At The Pizza Guy in Agawam they’re used to working with dough. In 2011, they were named best pizza in the Pioneer Valley. But now, more and more of that dough is being spent on rising costs associated with the high price of gasoline.

“I’ve noticed that the price of my food products has gone up because of the gas,” explained The Pizza Guy, Bob Aversa. “A lot of meat products and produce, they’ve all gone up quite a bit.”

Worrying about costs is nothing new for business owners, especially small businesses like this one.

For Aversa the bottom line is the bottom line. He says for now he’ll hold his prices steady but as the price of gas continues to rise, it continues to eat a larger and larger piece of the pie.

“We talk about that all the time. Do we raise the prices do we not raise the prices? But because of the prices of gas rising going back 3 years we already raised our prices I think to the point where we can’t do that anymore. So, at this point right now, we’re just kind of like swallowing the costs.”

With a good portion of the business made through delivery, high gas prices are also putting a crimp on drivers, many of whom rely on tips to make up for their mileage around town. Like most pizzerias, The Pizza Guy charges a small delivery fee, $1.50.

That cash goes straight to the driver and more times than not, straight into the tank.

“They depended on tips so hopefully people will realize the price of  gas is going up and maybe tip a little better for our drivers to make it worth their while to drive their pizza to their door.”

Aversa says he was forced to raise the delivery fee from a $1 to a $1.50 when gas prices spiked a few years back. He says he’s not going to increase it again, unless gas continues to go up. Then, he might reconsider after he discusses it with the boss – his wife.

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