Gas Prices Continue to Impact Consumers' Economic Outlook
ALEXANDRIA, Va. – Based on consumer surveys from the first half of 2013, the drop in gas prices seen during the last two weeks may increase consumer confidence and assist in ending the second quarter on a high note, according to NACS, the Association for Convenience & Fuel Retailing.
The Alexandria,Va.-based trade group’s latest monthly Consumer Fuels Survey, which polled 800 gas consumers from June 6-8, shows that the price of gasoline continues to have a significant impact on consumers' perception of the overall economy.
Fifty-seven percent of U.S. consumers say they are pessimistic about the economy, higher than the past two months. The increase directly corrrelates to an increase in gas prices seen in early June, according to NACS, which noted that the national gas price at the time of the survey was 6.5 cents higher than the month prior based on reported weekly gas prices from the Oil Price Information Service.
This month, 85 percent of consumers say that gas prices impact their feelings about the economy, and 59 percent believe gas prices will be higher over the next 30 days, up from 57 percent who said the same thing in May.
"There continues to be a direct correlation between gas price trends and consumer confidence," said NACS' Vice President of Government Relations John Eichberger. "Gas price trends cast a long shadow in consumers' minds. Rising or falling gas prices lead consumers to conclude that the same trend will continue for the next month, and that clearly affects their feelings about the economy."
Each month, NACS partners with Penn, Schoen and Berland Associates LLC to conduct its nationwide survey to measure consumer perceptions about gas prices and how they relate to broader economic conditions.
"Convenience stores are a major part of our economy," said Eichberger. "They generate 4.5 percent of the overall U.S. gross domestic product, process 160 million transactions each day and sell more than 80 percent of the gasoline purchased in the country. Convenience retailers know, and our recent NACS survey results verify, that when the price of fuel changes, so does the attitude of consumers both at our stores and anywhere else that they spend disposable income."
American drivers also consider price when it comes to future vehicle purchases, with fuel efficiency and cost most commonly cited as important factors, at 87 percent and 82 percent, respectively. Seventy-one percent of consumers list safety as an important factor, while cargo room (29 percent), emissions (27 percent) and horsepower (21 percent) are seen as less important.
Consumers also want more options at the gas pump and inside the store, with 44 percent stating they want more alternative fuels within the next three to five years; 43 percent stating they want the fueling itself to be faster; 23 percent stating they want more healthy food inside the store; and 16 percent stating they want the ability to pay using their phone.
"Our monthly survey continues to show that consumer sentiment is very fragile," said Eichberger. "Economic optimism or pessimism at the national level is very much linked to what consumers are seeing and experiencing at their local corner store. And the direction of prices on those street-side signs has a major influence over consumers' attitudes. When prices trend lower, consumers are more optimistic and that usually translates into good news for retailers."