Many business owners are passing along higher costs to customers, a survey shows.
Record-high gas prices are taking a toll on smaller businesses, with many passing along higher costs to customers.
In a recent nationwide survey of more than 1,000 small-business owners by Discover, 75 percent said rising gas prices were cutting into profits. Gas prices make up a larger portion of expenses for smaller businesses, according to Sastry Rachakonda, the director of Discover's business credit card.
"Because gas is more a part of operating costs than materials, it is not an easy pass-through expense for people like contractors, landscapers and other who do a lot of driving," Rashakonda said.
According to the National Federation of Independent Business, a Washington-based lobby group, more small-business owners reported weaker earnings last month, despite raising prices to keep pace with higher operating and material costs. "Widespread price increases could not counter pressures from higher costs and weaker sales," the group reported.
Last week, average gas prices hit a record-high $3.50 per gallon, the fourth straight week of increases, according to the Energy Information Administration. The nation's highest prices were in California, where many gas stations were charging over $3.90 per gallon.
On Tuesday, the Conference Board reported continued declines in consumer confidence in April, citing higher gas prices, along with weaker business and job conditions.
"Rising gas prices are undoubtedly heightening concerns," Lynn Franco, the Conference Board's director of consumer research, said in a statement.