ALEXANDRIA, Va. -- More than half of fuel consumers are feeling pessimistic about the economy, at a time when gas prices are 80 cents per gallon (CPG) lower than a year ago.
That’s the surprise finding in the latest fuel consumer survey from the National Association of Convenience Stores (NACS) that gauges the effect of gas prices on consumer sentiment.
Economic optimism fell five points between the June and July surveys, with 47% of fuel consumers feeling “somewhat” or “very” optimistic. The slim majority—40%—were “somewhat” pessimistic, while another 13% were “very” pessimistic.
As NACS points out, this decline is especially unexpected because optimism typically grows during the summer. Consider that in July 2014, consumer optimism rose seven points to hit 46%, even though gas prices were 80 CPG higher than today.
Of concern for retailers: 26% of consumers planned to cut their spending on items other than fuel in the upcoming month, a record high for the question since it was first added to the monthly survey in September 2014. Another 14% said they would spend more, while 60% would keep their spending the same.
Younger consumers—those between the ages of 18 and 34—were more optimistic than the average, with 57% feeling good about the economy; however, one in four also said they would spend less on items other than fuel in July.
“While gas prices remain relatively low, we may be seeing consumer frustration because prices aren’t falling over the summer months,” said Jeff Lenard, vice president of strategic industry initiatives at NACS. “Add to the mix consumers saying they will change behavior—and feel pain—at lower price points, and we may see pessimism linger, which could affect third-quarter sales.”
Consumers surveyed by NACS reported a median price of $2.79 per gallon in July, or a 4-CPG increase from the month prior; however, gas prices have stayed below the $3.00-per-gallon benchmark since November 2014.
When asked what price gasoline would need to hit before reducing driving, consumers chose a mean of $3.65 per gallon. NACS said this was actually the average price per gallon in July 2014, when consumers said they would drive less if prices hit $4.19 per gallon.
Only 28% of consumers said gas prices have a “great” effect on their economic sentiment. This compares to the 41% who felt so the same time a year ago.
Penn, Schoen & Berland Associates LLC conducted the survey for NACS with 1,101 gas consumers from July 1-6, 2015.
For a summary of results, click here.
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