Spending Surveys & High Gas Prices
Surveys show likely changes in consumer spending habits…
According to a new Discover Card Survey, consumers are more likely to cut their discretionary spending when gas prices rise vs. taking advantage of alternative forms of transportation. With nearly 60% of consumers paying more than $100 a month on gas– and half of all car owners driving vehicles that get less than 20 miles per gallon, cuts in spending on ’optional’ items are the first adjustments people make when fuel costs rise.
According to the Discover survey, if gas prices were to rise by a dollar, car owners would be likely to make the following changes:
75% would likely drive less
70% would cut back on entertainment spending
66% would change their vacation plans
64% would postpone a major purchase
52% would be somewhat or very likely to cut back on grocery spending
47% would be somewhat or more likely to buy a more fuel efficient car
ONLY 45% would be somewhat or very likely to carpool
ONLY 39% would be somewhat or very likely to walk or ride a bicycle
Another study by the International Council of Shopping Centers and UBS showed that 60% of those surveyed reduced the frequency of shopping trips during the last month but did not reduce their discretionary spending on items such as clothing, shoes, beauty products, etc. But travel and dining were hit– with 23% scaling back on travel and 26% on eating out.
Although the Discover study shows people are willing to make changes in their spending habits– the ICSC study shows consumers have just started making adjustments.
“Consumers continue to be resilient and adjust their shopping patterns to reduce the negative impact of high fuel prices,” said Michael P. Niemira, ICSC’s chief economist and director of research. About two-thirds of households describe themselves as more “efficient shoppers,” he said, “and make fewer visits per store but buy more or combine shopping trips better as a way of coping with the higher gasoline cost.”
