With oil hanging around $70, and gas likely to move above $3 for all of the summer, it bears looking at who gets hurt:
Airlines: It looked like they might get something of a recovery. Now, firms fresh out of bankruptcy like Delta (DAL) face risiing fuel costs and a competitive market for fares.
Cars, pick-ups, and SUVs. Detroit’s recovery is based, at least in part, on fuel prices being at a reasonable level. More profitable pick-ups and SUVs don’t sell well when gas prices are high. Look to Ford (F) to be set-back more than most with its F-series and Explorer losing more ground.
Retail. Wal-Mart (WMT), Target (TGT), and Home Depot (HD) keep mentioning that high gas prices hurt trips to the store. This summer, that will get worse.
Food retail. Starbucks (SBUX) and McDonald’s (MCD) pay to get their supplies delivered, mostly by truck. Those costs will rise. And, driving out to get a latte is going to be more expensive.
Overnight delivery companies. Fedex (FDX) and UPS (UPS) operate a lot of trucks and planes.
Cruise buiness. Carnival (CCL) and Royal Caribbean (RCL) can’t run those big engines on water.
Newspapers. Gannett (GCI) and McClatchy (MNI) spend a lot on truck papers to homes and newsstands.
Douglas A. McIntyre can be reached at [email protected].
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