Consumer Confidence Running Out Of Gas
According to the BIGresearch May Consumer Intentions & Actions Survey, consumer expectations are for gas price increases up to $3.32 a
gallon by Father's Day.
Gary Drenik, President & CEO of BIGresearch, says "The expectation of ever-increasing gas prices has seeped into consumer attitudes toward the
economy, as consumer confidence declined to 44.6% in May, versus April's 46.5%... consumers continue to look for ways to stretch their paychecks by deferring purchases."
consumer market may be running out of gas, says the report. 33.3% of consumers say they are worse off financially than they were a year ago. In addition, pricing sensitivity for apparel purchases
increased in May, with 18% saying they only buy on sale, up from April's 16.8%.
Influence of Higher Gas Prices (% of respondents)
Buying more store
Doing more comparative shopping online
Doing more comparative shopping with ad
closer to home
Shopping for sales more often
Shopping more online
Taking fewer shopping trips
Using coupons more
Source: BigResearch, May 2007
Consumers in the Midwest are more pessimistic in their
responses to gas price impacts and financial well being, as more Midwesterners said the following:
- Gas prices would impact Memorial Day spending (47.1%)
- They will be
driving less (42.7%)
- They will be taking fewer shopping trips (43%)
- They are deferring purchases of clothing (27.2%) and dining out (32.7%)
- They are decreasing
overall spending (29.7%)
- They believe the price of gas will reach $3.36 / gallon by Father's Day
- They feel worse off financially than a year ago (37.4%)
Additionally, the BIGresearch Insights for Marketing Executives includes some economic, financial and consumption updates with regard to consumer attitudes.
- Worry about political
and national security issues is down a point from April (17.5%) to 16.6%. Stay tuned next month to see how the resignation of Tony Blair - the U.S.'s closest ally over the war
on terror - affects consumer psyche.
- Practicality in purchasing declines in May. This month, 36.7% indicate they've become more practical or realistic in purchases in the last 6
months, down from 39.1% in April and 40.9% last year.
- Drivers are supplementing spending at the pump with dollars earmarked for savings and not cutting back so much on other
purchases. Debt repayment and savings rates continue to tumble. This month, fewer than a third (32.2%) are focused on paying down debt, down from last month (34.0%) and May '06
- Grads may be receiving laptops, digital cameras, and perhaps even a wide screen TV. Expect parents to make their Electronics purchases at Best Buy, where almost a third
(29.1%) of consumers shop most often, gaining from 25.6% last year. Second is Wal-Mart with 15.0% (declining from 18.4% in '06), followed by Circuit City (7.8%), Sears (2.6%),
and Target (2.2%).
- Lowe's is drilling into Home Depot's current lead with a +15.5 rating compared to the big Orange's -2.7 customer deficit:
- Six month
purchase intentions are down for all categories this month: autos, computer, furniture, home appliances, housing, jewelry, major home improvements, stereo equipment, TV, DVD/VCR, digital
cameras, and vacation travel.
For additional information
by Census Regions and other BIGresearch samples, click on Complimentary Top Line