Inflation felt by Hancock businesses, town operations

by Geoff Fox

Over the last year or so, prices around the country have seen a dramatic turn upwards across the board due to the current state of the pandemic.

Price pressures are hitting small business, individuals and families as the pandemic stretches toward its second yer.

Katherine Abraham, a professor in the University of Maryland Department of Economics, told Liam Farrell on Maryland Today that there are two things causing the prices to rise.

The first she said is the labor market tightening and employers are having more trouble recruiting people to fill jobs.

“That’s leading them to raise wages, which in turn is going to mean higher prices,” Abraham said.

Abraham also noted the big disruptions to the supply chains for many product people buy.

Because businesses don’t keep a lot of stock on hand, the pandemic has caused supply chains to be disrupted and deliveries are not showing up as planned. That, in turn, puts upward pressure on prices, she said.

But how has inflation affected businesses and town government here in Hancock?

Mayor Tim Smith said the rise in gas prices has caused the town to look at how Public Works and the Police Department use their vehicles.

Hancock gasoline price sign on Pennsylvania Avenue on Tuesday, December 14.

Smith said Public Works have been communicating to crews to take only one vehicle out, and to double up in that vehicle to make sure there aren’t too many town vehicles on the road.

He said police officers have been told to turn off their vehicles when they get out of them and not let them running.

“For the most part, we’re ok,” said Smith.

He did note businesses have told him they’ve seen decreases in the number of people coming out due to gas prices, and not going to places they don’t have to.

People are also looking at grocery prices as well, he said, and wondering if they’ll have to start shopping differently.

“It’s hitting all the way around,” Smith said. “At this point, I think we’re going to have to be more conservative on our fuel.”

The town is going to have to ride it out just like everyone else is, he added.

People are still out Christmas shopping and going out doing things, but being more mindful of other activities.

Smith has noticed people who drive big trucks have moved to more gas efficient vehicles and those folks who travel to the city to work are doubling up on their traveling as well.

Pricing out town projects and supplies is also becoming more difficult.

One project was the replacement of a pump in the town’s second well. Smith said it had to be replaced on Thanksgiving Day. The pump was one the town had on hand, as they always keep a spare.

Smith said he recently received an email from the supplier stating that because of inflation, the price of a new spare would only be guaranteed for five days.

“The price did go up,” he said. It went from a $6,000 pump to a $9,000 pump. Smith said it is a necessary cost because if a pump would go down, the town would have a spare.

Town water and sanitation bills will stay at what they currently are, but the trash and recycling services are at a point where the contract is going out to bid.

“I don’t anticipate on anybody’s water, trash, or sewer going up,” he said.

When it comes to spending, the town has been watching prices and how urgent an item really is.

“I think we’ll be in good shape until this wave goes through and hopefully come back down,” he said.

Smith is also the owner of The Fractured Banana on Main Street and has noticed inflation pressures there as well.

He noted ice cream prices have gone up about 5% and there aren’t as many deliveries, with designated days set more often.

Smith also pointed to minimum wage costs as an upcoming thing to watch — there will be an increase in state minimum wage to $12.50 an hour on January 1, 2022.

Smith said the inflation isn’t the business owner’s fault for the increase in prices.

“If somebody goes into a business and they see prices may have went up a little bit, just don’t take it out on the owner and think that it’s just them raising the prices. It’s because they got price raises, so they have to have that offset,” Smith said.

At Krazy Rayz eatery in Hancock, owners have seen prices go up and have had to raise their prices as well.

Crystal Metcalf who works for her mother, Linda Munday, at Krazy Rayz, said when the prices went up, customers have complained, wondering why prices have gone up.

Waitress have seen tips drop as prices have gone up.

Food costs, she said, have gone up 20% to 30%.

While the higher prices have hurt smaller businesses, Munday said they haven’t really hurt Krazy Rayz, but people don’t buy in bulk as they did before.

She noted people have started buying the smaller portion of Krazy Fries because they are $4 cheaper than the large.

There have been a number of shortages as well due to the costs and, of course, supply chain issues.

Munday said costs on chicken wings have gone up 50%.

“I had to raise my prices,” she said. “I didn’t want to.”

When the prices first started going up, Munday said a number of customers were asking about the hike, but now they’ve gotten used to it.

Metcalf noted the shortage in chicken tenders and even fried pickles, which other businesses have experienced as well.

Other adjustments made at Krayz Rayz due to the inflation and supply chain issues has been taking things off the menu or redoing the entire menu to please customers.

“You kind of have to flip-flop your menu,” Metcalf said.

Metcalf also works at Potomac River Grill. She said they’ve had to remove items every so often due shortages, which is at least once a month.

There are some things that can’t be ordered at all. Metcalf said there’s been one item they’ve been trying to order at Potomac River Grill that hasn’t been available for a few weeks.

“Thank God we ordered extra when we could,” she said. “As a business owner, you order extra until you can get it back.”

Metcalf said she has noticed the prices and how they are hurting all businesses. There’s also there’s the short staffing issues.

“I think it’s just in general, everybody’s got to get used to COVID,” she said. “This is the new normal.”

Metcalf said she doesn’t see prices going back down.