No Cookie Cutting Around High Gas Prices

By Features FOXBusiness

The cookie dough isn't the only thing rising at Great American Cookies in Henderson, Nevada.

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"When I started this business, I was paying $30 a box for chocolate chip, now we're paying $50," said Michael Solomon, who owns nine Great American Cookies locations around the country, including two in Nevada. "The freight used to be 15 cents a pound, now it's a dollar."

Typically, Solomon said he orders a monthly shipment of cookie dough from the Great American Cookies headquarters in Atlanta. But in the past month, deliveries to his Nevada locations have increased drastically -- thanks to high gas prices. In January, delivery costs were $1,750. By March, costs were up 111 percent to a whopping $3,700. According to AAA's Daily Fuel Gauge Report, the average price of the diesel fuel used by delivery trucks is $3.929, nearly a 12 percent increase from February's average of $3.523. It has forced Solomon to raise the price of each cookie by ten cents, an increase he’s all but sure will have an impact on future sales.

"Anytime you raise your prices, you see your customer accounts fall a little bit," said Solomon. "Unfortunately, the cost of each cookie is going up because the cost of gasoline is higher."

For business owners like Solomon who are affected by the escalating gas prices, they're more than likely thinking the same question: When will it end?

"Until the turmoil in the Middle East and North Africa is resolved, I expect prices to stay high," said Dr. Stephen Brown, a professor and economist from the University of Nevada, Las Vegas. "Even though the disruptions haven't been all that great, it's been sufficient enough that the speculators on Wall Street are saying 'Gee, we're concerned about that disruption, we need to hold some oil off the market.’ That's what causes the gas prices to go up."

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And when it comes to resolving problems in the Middle East, he isn't too optimistic about things getting settled anytime soon.

"I don't see any signs right now that the events in Libya are coming to a resolution," said Brown.

Solomon said due to the circumstances Great American Cookies is willing to subsidize the March delivery bill of $3,700, but there’s no guarantee it will do the same for April.

“It just really cuts into your bottom line,” said Solomon. “It’s just one more expense you have to deal with.”

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