Gas Price Uncertainty Takes its Toll

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Gas Price Uncertainty Takes its Toll

WASHINGTON -- As the summer driving season gets underway, the path of gas prices is a cause for concern to both consumers and retailers. According to the survey by the National Retail Federation's (NRF) 2007 Gas Prices Consumer Intentions and Actions Survey, conducted by BIGresearch, 74.2 percent of consumers believe fluctuating gas prices have impacted their spending habits.

The average consumer predicted the price of gas will reach $3.32 per gallon by Father's Day, the survey found, and as a result, consumers stated they are finding ways to offset the financial impact. Approximately 40 percent stated they are taking fewer shopping trips, while 37.9 percent stated they are shopping closer to home, and more than a third of consumers are shopping for sales more often.

"Consumers are entering the summer season with a cautious view of increasing gas prices," NRF president and CEO Tracy Mullin said in a written statement. "To offset the effects of higher prices, more consumers are giving their wallets a little extra cushion by cutting back on discretionary spending or choosing to frequent retailers closer to home."

In addition, the survey also found that 40 percent of consumers are choosing to drive less, to lighten the impact of higher prices at the pumps. Also, 32.6 percent decreased their vacation/travel and 31.1 percent are dining out less.

The impact of prices stretches beyond driving and cars. Almost 25 percent of respondents are spending less on clothing, and 20 percent have delayed a major purchase such as a car, television or furniture, they survey stated.

However, a recent U.S. Department of Energy report doesn't reveal a decrease in gasoline demand. The nation's demand for gas rose by more than 2 percent for the first three months of 2007, The Associated Press reported.

Meanwhile, a conflicting report by the Department of Transportation suggests that Americans drove almost 1 percent fewer miles than a year prior, the report stated. Analysts told the AP that because of this year's late winter storms in the Northeast, its not surprise that people drove less.