As Fuel Prices Fall, Consumers Focus on Other Issues
Published in CSP Daily News
Lower gas prices have loosened up consumers' behavior, but not to pre-2008 levels
NEW YORK -- In the summer of 2008, U.S. gasoline prices hit record highs, with an average price per gallon topping $4 a gallon. As a result, consumers changed their behavior in order to save gasoline when possible, according to The Nielsen Co. For example, 78% said that they combined errands and trips where before they might not have thought twice about separate trips to the grocery store and mall. Consumers stayed home more often, choosing to entertain at home and eat out less. These money-saving steps were taken in an effort to save money for vital needs such as gasoline, food [image-nocss] and other household essentials.
But just one year later, gasoline prices have fallen considerably. In June and July of 2009, the average price per gallon for regular gasoline was between $2.50 to $2.62. According to the seventh update to Nielsen's gasoline price impact survey, lower gasoline prices have loosened up consumers' behavior, although not to pre-2008 levels. For example, 71% of respondents said that they were still combining errands and trips in an effort to save gasolinedown from a year ago, but still above the 68% who said the same in 2007. Another 44% said that they were doing more things at home, down from 51% in 2008 but still higher than the 39% in 2007.
One area that consumers have not yet rushed back to is eating out: 52% said that they were eating out less, the same as 2008, and well above the 38% who said the same in 2007.
Meanwhile, carpooling has dropped, with just 5% of respondents indicating that they were sharing rides, a decline of two points from 2008.
While some behavior seems to be returning to pre-2008 patterns, it's clear that consumers are still adjusting behavior, due in part to gas prices. One-quarter of U.S. households are buying gasoline at locations because of incentives tied to spending levels at a grocery store where they shop. They continue to buy less expensive grocery brands and shop at supercenters. As Nielsen has highlighted previously, the use of coupons is high, with 38% of respondents indicating that they are using more coupons.
"Compared to last year, the price of gas was low this summer, making it one less thing consumers had to worry about as they grappled with issues such as job security, retirement, putting kids through college and making mortgage payments. That said, with economic recovery beginning to take hold, it will be interesting to see if consumer behavior shifts considerably as they feel more confident about their circumstances," said Todd Hale, senior vice president of Consumer & Shopper Insights at Nielsen.
New York City-based Nielsen started conducting the Gas Impact Survey in July 2005. This year's survey had more than 63,000 respondents, it said.