Diesel prices fuel restaurant layoffs
Posted May 14, 2008
Updated April 20, 2010
Durham, N.C. — Editor's note: Kemp's Seafood House returned to table service in the fall of 2008.
A popular seafood restaurant has gone self-serve to cut costs as rising fuel prices continue to eat up its profits.
Kemp's Seafood House restructured to eliminate table service and assigned waitstaff to other positions to hold the line on its menu prices, owner Kemp Pendergrass said, blaming soaring seafood prices on soaring fuel prices.
Pendergrass said he also cut back spending on services like grass-cutting and window-washing.
Gas and diesel prices hit an all-time high Wednesday in the Triangle. The average price for a gallon unleaded regular gas was $3.74, while the average price for a gallon of diesel, which was cheaper than gas a year ago, was $4.38.
Fishing boats run on diesel, as do the trucks that haul seafood from the docks to restaurants and supermarkets.
The added fuel cost is passed down the line. The price of a gallon of oysters, for example, is up almost $20 in the last year.
"You've got to realize that these guys have to go out on their boats to get the fish, bring it back in and then ship it up here," Pendergrass said. "So, that's just one of the things that's hurt this industry.
"I don't see the economy making a dramatic turn, so we had to do our due diligence and figure out a way to lower our prices for our consumers."
Down the road at JJ's Fish & Chicken, owner Ash Hamed said he has watched his profit margins shrink but hasn't yet cut his staff.
"You actually have to reduce your price to accommodate for the gas increase and swallow the difference," Hamed said. "So, your profit margin shrinks from 45 percent to 30 percent to 25 percent."
He said he hopes prices will eventually stabilize and begin to drop.
"Hope is what keeps you motivated," he said.