Gasoline Prices Have Significant Effect On Consumers' Perceptions of Overall Economy
SEE ALSO: America's 'Opium War' with Gasoline
Gasoline prices continue to have a significant effect on consumers’ perceptions of the overall economy, according to the latest findings of the monthly NACS Consumer Fuels Survey.
ALEXANDRIA, VA June 26, 2013; NACSonline reported that the drop in gas prices over the past two weeks may increase consumer confidence and help end the 2nd quarter on a high note, based on consumer surveys from the first half of 2013.
The price of a gallon of gasoline continues to have a significant impact on consumers’ perceptions of the overall economy, according to the latest findings of the monthly NACS Consumer Fuels Survey. Compared to the previous two months, an increasing percentage of U.S. consumers say they are pessimistic about the economy (57%). This rise in consumer pessimism directly tracks the early June increase in gas prices. The national gas price at the time of the survey was 6.5 cents per gallon higher than the month prior, based on reported weekly gas prices from the Oil Price Information Service (OPIS).
Continuing a trend observed for the past six months in the NACS Consumer Fuels Survey, consumer pessimism increases in months when gas prices rise while consumer optimism increases when prices fall.
In June, fully 85% of consumers say that gas prices impact their feelings about the economy. To that end, nearly three in five consumers (59%) think gas prices will be higher over the next 30 days, an increase from the 57% who gave the same answer 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.”
Every month, NACS conducts a nationwide survey in partnership with Penn, Schoen and Berland Associates LLC 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% of the overall U.S. gross domestic product, process 160 million transactions each day and sell more than 80% 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”
Consumer price concerns go beyond the immediacy of the pump, as American drivers also say they are focused on price when they consider their next vehicle. “Fuel efficiency” and “cost” are the top two factors cited by consumers when asked to select from a series of factors that are important to them in considering future car purchases (87% and 82%, respectively). “Safety” trails in third place, with just 71% of consumers saying it is an important factor. Amenities such as cargo room (29%), emissions (27%) and horsepower (21%) are considerably less important than price-related factors when consumers consider making a car purchase in the future.
What about the future fueling station? Price has long been the most important factor that determines where consumers shop for gas. However, as they look towards the future, fuels consumers want more options at the pump and inside the store. Nearly half of consumers say that they want more alternative fuels choices at the pump within the next three to five years and they also want the fueling itself to be even faster (44% and 43%, respectively). Nearly a quarter (23%) want to see more healthy food inside the store, and nearly one in six want the ability to pay using their phone (16%).
“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.”
The NACS consumer survey was conducted by Penn, Schoen and Berland Associates LLC, with 800 gas consumers surveyed from June 6-8, 2013. The margin of error for the entire sample is +/- 3.46 at the 95% confidence interval and higher for subgroups. Some percentages may add to more or less than 100% due to rounding. Summary results from this and previous surveys can be found at www.nacsonline.com/gasprices.