Rising gasoline prices had an uneven impact on consumer spending depending on the age, income, and region of households, according to a recent survey.
Younger, lower income or Midwest consumers were the most affected, survey conducted by the International Council of Shopping Centers (ICSC), but most households reported that the record high gasoline prices have not caused consumers to change their spending patterns, although some of those that were most affected have changed their driving and shopping patterns.
Record high gasoline prices over the week of May 16, which hit $2.06 per gallon nationwide according to the U.S. Energy Information Agency, resulted in 42% of consumers reducing their driving. The shopping format that was thus far most affected by the reduced frequency of store visits was the downtown shopping area (64%), while neighborhood shopping centers were least affected (45%), according to the survey. But still, 55% of the households reported no impact from the increased fuel cost.
Despite some reduction in the frequency of shopping, 58% of households reported that they did not reduce their spending over the last month on such items as clothing, shoes, jewelry, consumer electronics, beauty services or on non-essential items, nor did they limit their spending at restaurants and spas. Of the consumers that did cut back on spending, it was evenly split between those that cut back considerably (20%) and those that cut back modestly (20%).
Based on ICSC analysis, the increase in gasoline prices has added between $7 and $10 per week to the average consumer’s weekly expenditure relative to last year, depending on the amount of driving done.
“Over the last year, there has been about a $13 increase in average weekly earnings, which is a key reason why the economy and consumer spending has seen a limited impact of the higher consumer expenditures on gasoline,” said Michael P. Niemira, ICSC’s chief economist and director of research. “Moreover, the ICSC survey found 52% of households have become more ‘efficient shoppers’—making fewer visits per store, but buying more or combining shopping trips better – as a way of coping with the higher gasoline cost.“
Opinion Research Corporation conducted the survey on behalf of ICSC from May 20-23, 2004. The survey sampled 1,036 adults comprising 527 men and 509 women, 18 years of age and older, living in private households in the continental United States.