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Gas Guzzles Bigger Share of Consumer Spend
Nearly half of US consumers (43.2%) do not believe rising gas prices will have a major impact on their spending, but others are choosing to scale back on vacation plans, new clothes, and even groceries, according to a new survey by BIG Research for the National Retail Federation (NRF).
The National Retail Federation, which commissioned the 2004 Gas Prices Consumer Intentions and Actions Survey, is the world's largest retail trade association, covering all retail formats and channels and representing an industry with more than 1.4 million establishments, more than 23 million employees and 2003 sales of $3.8 trillion.
Understandably, travel and vacation plans are hardest hit, with nearly one in three consumers (31.6%) planning to cut them down or out due to higher prices at the pumps. Next most affected are eating out (26.9% of consumers planning to cut down), clothes buying (20.9%), groceries (15.9%) and major purchases like cars, TVs, and furniture (13.6% planning to delay them).
Households with lower income are, predictably, more likely to be considering economies: 52.9% of consumers with household incomes greater than $50,000 say they are not likely to feel a major impact from the rises, but only 38.1% with household incomes under $50,000.
NRF President and CEO Tracy Mullin says retailers 'know that when consumers are forced to spend more of their disposable income on gasoline, they will scale back spending in other areas. Ultimately, higher prices at the pump act as an additional tax on consumers, and consumers don't like to be taxed'.
'Even if consumers' wallets aren't completely drained by the rising cost of fuel, an increase in gas prices has a psychological effect', adds Phil Rist, Vice President of Strategy for BIGresearch. 'Though some consumers are only paying $4 or $5 more a week to fill up their cars, many will be more conscious of what they spend in other areas to make up for the small, but significant, loss'.
BIGresearch polled 6,899 consumers between May 5 and 13.
Web sites are at www.bigresearch.com and www.nrf.com
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