Nearly half of US consumers (49%) are reducing their spending to compensate for rising gas prices – that’s up four percentage points from June 2007 – by combining shopping trips and errands (70%), eating out less (41%) and staying home more (39%), according to the Nielsen Company.
“Large numbers of consumers eating out less and staying home more often signal a tough year for some restaurants,” said Todd Hale, SVP of Consumer Shopping & Insights, Nielsen Consumer Panel Services.
“But there may be an opportunity for consumer packaged goods (CPG) manufacturers and retailers to find continued growth in healthy, at-home meal solutions and at-work meals.”
Record-high gas prices likely contributed to 2007’s less-than-stellar holiday sales season, too:
- Some 60% of consumers surveyed said they had less money to spend during the holidays due to increased gas prices.
- 44% of consumers reported they planned on spending less money on holiday gifts in 2007 as compared to the year prior.
- There was, however, a jump in the number of consumers shopping via 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,” Hale said.
- Gas prices are affecting where consumers shop, with 27% of consumers reacting by shopping more at supercenters, or megastores and big-box stores, where more items needed are in one store.
- Increased fuel prices are also resulting in more coupon clipping, with 25% of consumers using coupons to save money, up from 20% in June 2007.
- Moreover, 23% of consumers say 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.
“2008 will likely be a challenging year for US 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,” said Hale.
“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.”
About the survey: Results are based on Nielsen Homescan survey responses from nearly 26,000 US consumers, geographically and demographically representative of the total US population. The survey was conducted in December 2007, when regular gas averaged $3.06, according to the Energy Information Administration.