• by Jack Loechner , Staff Writer @mp_research, May 30, 2007

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."

 The 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)
	All	North-east	Mid-west	South	West
Buying more store brand/generic products	22.2%	17.5%	25.7%	24.0%	20.3%
Doing more comparative shopping online	16.8%	16.0%	17.6%	16.8%	16.6%
Doing more comparative shopping with ad circulars/newspapers	23.3%	21.4%	25.5%	24.2%	20.9%(
Shopping closer to home	37.9%	33.8%	38.5%	40.7%	36.9%
Shopping for sales more often	30.7%	28.7%	33.6%	31.3%	28.6%
Shopping more online	13.3%	13.8%	12.3%	14.5%	12.4%
Taking fewer shopping trips	40.2%	34.2%	43.0%	43.0%	38.3%
Using coupons more	23.5%	22.4%	24.8%	24.8%	21.2%
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 (37.1%).
• 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 Findings here.