Survey: U.S. consumers reduce spending to combat gas prices
January 15, 2008
Schaumburg, Ill.—Nearly half (49 percent) of U.S. consumers are reducing their spending to compensate for rising gas prices, up four points from June 2007, according to new research from The Nielsen Co.
Consumers are also battling high gas prices by combining shopping trips and errands (70 percent), eating out less (41 percent) and staying home more often (39 percent).
“Our research shows consumers are adjusting their spending to a significant degree to counterbalance rising gas prices,” Todd Hale, senior vice president of Consumer Shopping and Insights, Nielsen Consumer Panel Services, said in a statement released today.
Nielsen’s survey also found that record-high gas prices likely contributed to 2007’s less-than-stellar holiday sales season. Sixty percent of consumers surveyed said they had less money to spend during the holidays due to increased gas prices.
“Unlike 2005 and 2006, gas prices didn’t drop in the fourth quarter of 2007 to enable consumers to do their typical holiday binge buying,” Hale said. “That said, our research shows a jump in consumers shopping on the Internet as a way to deal with high gas prices. This should be a wake-up call for manufacturers and retailers alike to step up their ‘direct-to-consumer’ efforts and utilize the Internet to communicate directly with consumers in 2008, emphasizing value, variety and convenience.”
Nielsen’s research also found that gas prices are impacting where consumers shop, with 27 percent of consumers reacting to high gas prices by shopping more at supercenters, or megastores and big-box stores, where more items needed are in one store.
“Discretionary spending in 2008 is likely to be a challenge for most low- and middle-income shoppers, the core supercenter shoppers,” Hale said. “Although recent store expansions mean that supercenters are closer to more shoppers, nearly a third of households still travel 11 miles or more to a supercenter, and high gas prices will likely reduce the number of quick trips these households make. Supercenter retailers will need to entice shoppers with stronger earning power who are less vulnerable to high gas prices.”
Increased fuel prices are resulting in more coupon clipping, with 25 percent of consumers using coupons to save money, up from 20 percent in June 2007. Twenty-three percent of consumers indicate they will buy less expensive grocery brands to deal with higher gas prices, signaling a possible boost for private-label or store-brand products and lower-priced branded products.
“This year will likely be challenging for U.S. consumers and the economy as a whole as we grapple with growing inflation, credit card debt, declining house values—as well as expectations for gasoline to hit $3.40 by spring,” Hale said. “Manufacturers and retailers need to be alert to the fact that consumers are looking to save by altering where they shop, how they shop and what products and brands they buy. Value, convenience and competitive pricing will be more important than ever in the year ahead.”
This research was based on Nielsen Homescan survey responses from nearly 26,000 U.S. consumers, geographically and demographically representative of the total U.S. population. The survey was conducted in December 2007, when regular gas averaged $3.06 per gallon.
The Nielsen Co. is a global information and media company with leading market positions in marketing information, media information, online intelligence, mobile measurement, trade shows and business publications, and the parent company of the National Jeweler Network.
For more information about The Nielsen Co., visit the company’s Web site, Nielsen.com.