Bad for Beale St. Business - WMC Action News 5 - Memphis, Tennessee

Bad for Beale St. Business

Low temperatures and high heating bills could spell bad news for Beale Street. Economists say the ripple effect of soaring natural gas prices will reach farther than your wallet. The upcoming 70% hike could take a bite out of the Bluff City's multi-billion dollar tourism industry.

Consumer spending accounts for two-thirds of our economy. It already fell in August and could put another plug in Memphis profits when people start holding their pockets close this winter.

"It's gonna have an impact on discretionary spending not only by the locals, but the visitors that plan trips," said Kevin Kane of the Convention and Visitors Bureau (CVB).

Entertainment is the first thing people cut back on when money is tight. The CVB is not the only outfit keeping a close eye on the hike. Restaurants like Celebrity's on Beale Street hope they will not get burned.

"Your prices are set in a cost-effective way and you just have to try to make sure you get the number of clientele in to offset all the those things," explained the restaurant's General Manager, Gary Munyan.

Celebrity's uses natural gas to cook, heat and cool. So, they will get hit with a double whammy if people cut back to pay for their own high heating bills.

"You're gonna stay warm no matter what in the winter so you're gonna have to let a few things go maybe. Ya know it's a sad thing," said Kentucky tourist John Holcomb.

Downtown business owners hope the upcoming Voodoo Concert and corporate holiday events will offset any losses that could take a bite out of Memphis' bottom line.

"It's a two and a half billion dollar industry for Memphis and Shelby County supporting up to 53,000 jobs, so it's a big business for this community," said Kane.

One good thing: the decrease in spending is pushing up our savings rate, but that leads to less money circulating in our economy and higher inflation.

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