With an estimated $535 extra spent per household on gasoline this past year, coupled with rising consumer packaged goods (CPG) product prices, U.S. consumers have certainly felt their budgets strain. Yet, the CPG industry does not appear to have been negatively impacted. According to the latest Times & Trends report, Gas Price Impact: How Spending at the Pump Affects Spending at the Register, from Information Resources, Inc. (IRI), total CPG industry sales have benefited as consumers shifted spending from luxuries, such as dining out and entertainment. However, consumers have altered shopping patterns, decreasing their number of store visits to conserve gas.
The IRI study recommends that CPG marketers consider planning for future periods of gas escalation, which will impact consumer shopping and purchase behavior across stores and brands.
Health and beauty care spending does not appear to be directly tied to gas prices; sales improved when gas prices declined during the fall and winter this past year and continued to improve when gas prices sharply increased during the spring. Consumers increased trips to local drug stores presumably to fill in product needs before the next big shopping trip. In fact, during this time frame, drug store dollar share increased a half point—one of the largest drug store increases in several years. More info: http://us.infores.com.
Rising Gas Prices Alter Shopping Patterns
Published November 3, 2006
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