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High Gas Prices Impacting Cali Retailers

Published March 7, 2008

OAKLAND, CA (BRAIN)—For Tip Top Bike Shop in Oakland, high gas prices are a godsend.

“We cheer every rise in prices,” said Richard Oelerich, owner of Tip Top Bike Shop. “We get one person a week coming in here and saying they’re not driving anymore.”

And with good reason. Prices at the pump are at an all-time high in the Golden State. California’s average price for a gallon of regular has never been higher. According to AAA auto club, the statewide average reached $3.50 last week, beating out last year’s high of $3.49. It looks as though $4 gas will become a reality this summer for many Californians.

While high gas prices can be a boon for commuter shops such as Tip Top, some Bay Area shops such as Livermore Cyclery are feeling the pinch.

“It’s getting expensive for our guys to drive in to work,” said Stephen Howard, owner of Livermore Cyclery. “I need to give those guys a bump in salary, which means I have to raise prices [on inventory] to offset those increases.”

Howard is hoping for a silver lining that will include people choosing biking as a less expensive hobby—and less travel intensive hobby—as a result of these rising gas prices.

For City Cycle in San Francisco’s Marina District, locals are used to paying hefty gas prices, so the rise isn’t affecting sales one way or another.

“We’ve seen a lot of dusty bikes come out of the garage,” said Jamaica Lambie, a fitter for City Cycle. “It’s translating into lots of tune ups.”

January was a slow month for Tip Top, with the Bay Area being deluged by heavy doses of rain and cold. But there was another reason as well.

“I think the [economic doom and gloom] news made them very afraid, but then people looked in their pockets, and said, ‘Hey, I still have money,’” Oelerich said. “People have been coming in now. Our sales will be up [for the year].”

For how the slumping economy will affect bikes sales this year, read the April 1 issue of Bicycle Retailer and Industry News.

—Jason Norman

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