Consumers spending less as gas prices rise
July 17, 2008
by FoodBusinessNews.net Staff
SCHAUMBURG, ILL. — More U.S. consumers are taking steps in their spending to compensate for rising gas prices, according to research from The Nielsen Co.
Almost two-thirds of consumers are reducing spending, and this number was up 18 points since June 2007 and up 14 points in the last six months.
"With gas prices passing the $4 per gallon mark, consumers are altering their driving and spending habits at dramatic levels," said Todd Hale, senior vice-president of consumer and shopper insights with Nielsen. "While discretionary spending is likely to be a challenge for most low- and middle-income shoppers, even affluent consumers are looking for ways to make their dollars go further."
In fact, 78% of consumers are combining shopping trips and more than half (52%) of consumers are eating out less and staying home more often (51%). Nearly one-third of consumers are using more coupons to save money and 28% of consumers are doing more shopping at supercenters where there are more items in one store requiring fewer shopping trips.
In addition, 35% of consumers are buying less expensive brands.
"Many retailers are increasing their focus on private label to help shoppers cope with rising gas and food prices," Mr. Hale said. "While private label shows significant growth, it’s important to remember that more than half of private label sales growth comes from only four product categories — milk, fresh eggs, cheese and bread or baked goods — categories greatly impacted by inflationary pricing resulting from higher livestock feed prices or higher raw ingredient prices. Retailers need to be judicious in selecting categories where private label opportunities exist."
Nielsen research shows consumers are shopping on-line and carpooling or using public transportation more often.