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Fuelling the Industry: How gas prices affect the floral world
How gas prices affect the floral world |
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Written by Amanda Ryder
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At the beginning of July, many gas stations located across the country boasted price signs that ranged from the $1.30/litre mark on up to $1.50, a drastic jump from numbers seen just one year ago. For some, this has led to carpooling or alternative transport methods, but for florists, who depend on gas to get their orders out, these options just aren’t possible.
We talked with florists, wholesalers and growers from across the country to gauge how pump prices are affecting their business.
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| Florists are finding it difficult to keep up with unpredictable rising cost of gas. |
At Flowers Buds in Charlottetown, P.E.I, co-owner Vikki Sweeney says they’ve managed to keep their delivery prices stable for the moment, although, the florist is seeing an increase in freight from their suppliers. Sweeney says this has made them more conscious of the way they order their supplies. “Instead of ordering two or three times a week from our hard goods supplier, we order it all at once.” She says they’re also trying to group deliveries as much as possible, while still maintaining customer service.
Loretta Dwyer, owner of Loretta’s Flower World in Gander, N.L., says the situation is “definitely affecting the bottom line.” Their delivery prices have increased and as a result, the shop has received several complaints. She’s also seen an increase in freight from her suppliers and says “there’s not one thing that’s not gone up – from ribbon to floral tape…but you just gotta go with it.”
In Quebec City, Mylene Belanger of Salon Fleuri says fuel surcharges have forced the shop to rethink how they order from suppliers. “Everything we want to order from outside the city has more expensive delivery costs,” says Belanger. “We have to make a bigger order now. We won’t order any small orders. We have to think effectiveness.”
Like many other industries, the cost of oil impacts more than just transportation. At Jane’s Floral Dreams in Saskatoon, owner Lyle Hessdorfer says they’ve seen increases on any product made from oil, such as cellophane or plastic. Their fresh product is also costing them more because it’s not always something they can order all at once. “With flowers, we really feel the pinch because we are getting them every week.” Hessdorfer says he’s even seen a change in how often his customers are opening their wallets. “A lot of people are watching their pennies more. They are spending more to fill up their gas tank so there’s less cash flow.”
As of July 1, florists in British Columbia have an extra cost added into their pump prices. The B.C. government’s carbon tax went into effect on Canada Day, tacking on 2.4 cents for every litre of gas. The tax will increase each year until it reaches an extra 7.02 cents/litre in 2012. This forced gas station prices in July up to the $1.50/litre mark in many areas of the province.
Valerie Turner, a floral designer at Petals Plus in Victoria, says that gas prices definitely affect the shop and this is compounded by the carbon tax and the florist’s location off the mainland. “Being on the island, we pay for ferry fuel as well as car fuel.” When it comes to deliveries, Turner says their delivery person raised prices so they had to follow suit and increase delivery fees for their customers right before Mother’s Day. To try and cut down on costs, Turner says “we will do our own deliveries if there’s something on the way home.” Although for the most part, it would cost the shop more to do their own deliveries on a full-time basis or to pick up their own supplies. “Being stuck on the island we have to rely on others to get our product to us.”
Floral wholesalers and growers also rely heavily on delivery trucks to get the product to you, the florists. Now that you’ve heard what Canadian florists have to say, here’s a look at how both wholesalers and growers are coping with escalating pump prices.
At Florists Supply, president Laurie Nesbitt says any product in the industry manufactured with oil products will see price increases. “Items such as plastic design containers and plastic casket saddles are examples of products that will be affected.” Fresh flowers and suppliers are not exempt from price increases due to freight charges and fuel surcharges and Nesbitt says “the industry should be aware of the rising landed costs and ensure prices are updated to maintain gross profit margins.” And just like florists, wholesalers are also facing higher operating costs due to delivery and salesperson vehicles. As a result, Nesbitt says the company has raised delivery fees to keep pace with the rising costs.
In Ontario, Mississauga’s Action Imports, like many wholesalers, have had to deal with what president Gerry Lekkerkerker calls “a double whammy. We have gas prices and the Chinese price increases.” The company imports a large volume of containers from overseas and one product that’s been particularly affected over the last few months is ceramic. Not only are the products heavier, increasing freight, but in China, ceramics are made by firing ovens with natural gas, a process that’s only becoming more expensive.
To try and remedy the gas price situation, Lekkerkerker says Action Imports is working to decrease the packaging in their shipments to customers in order to fit more products in a truckload. “We are trying to reduce the weight and the extra packaging,” he says and adds that this initiative has also played into the eco-friendly movement by reducing the amount of waste the company creates.
Similar to other segments in the floral industry, growers are also feeling the pain when it comes to delivery fees. When Eric Voogt of Westcan Greenhouses in Langley, B.C., looks at our current pump prices, he worries about how high greenhouse energy prices will reach this winter. Voogt says that relatively speaking, natural gas prices over the past winter were “somewhat reasonable.” However, he’s seen estimates that say heating prices could rise by 70 per cent in the coming winter. If the estimates are true, Voogt expects that this increase, in combination with B.C.’s carbon tax, could cost the company an extra $100,000 on natural gas alone. He suspects that if gas continues on the same unpredictable path, the higher fuel costs, coupled with the U.S. exchange rate could spell the end for some of the weaker grower companies and force older ones into retirement.
In Falmouth, N.S., grower Mac Isnor of Avon Valley Greenhouses says their delivery area carries quite a big territory and trucks are travelling long distances so they have to keep up with fuel surcharges. They work hard to ensure that trucks are full going out and whenever possible try to find efficient return routes. He’s uncertain when it comes to predicting what the long-term effects of high fuel costs will mean for the business. “Whether customers will have less disposable income to spend…remains to be seen.” On a positive note, Isnor adds that it’s possible floral purchases could become a pick-me-up as people stay home more to avoid using gas. “Take-home flowers may become more popular.”
How are you coping with high gas prices?Visit our blog to have your say.
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