Consumers' Spring Fuel Blues
High gas prices push optimism down to low point in 2014
ALEXANDRIA, Va. -- The spring jump in retail gasoline prices has pushed consumer optimism down to its lowest point in the year.
That's the finding of the latest NACS Consumer Fuels Survey, which measures how gasoline prices impact consumer sentiment. According to the May survey, 41% of consumers said they felt optimistic about the economy, three points less than the month prior.
NACS cited the 14-cent-per-gallon (CPG) national average run-up in gasoline prices this past April as refiners transitioned to summer-blend fuels, as well as cold, rainy weather across much of the country, as likely culprits behind the drop in optimism.
A total of 86% of consumers said that gasoline prices affect their feelings about the economy, while 79% said they noticed that gasoline prices rose over the past 30 days, which is the highest percentage since March 2013. Meanwhile, 66% expected prices to increase over the next 30 days--the highest percentage since NACS began conducting the Consumer Fuels Survey in January 2013.
"Higher gas prices usually mean tighter margins for fuel retailers as they compete for price-sensitive customers," said John Eichberger, vice president of government relations at NACS. "Combine that with reduced in-store sales that most retailers have faced because of bad weather and the first few months of the year have been rough for both consumers and retailers."
Consumers' bad attitudes appear to depend on their age. More than one-half of 18- to 34-year-olds felt positive about the economy, compared to only 34% of those older than 50.
The survey also revealed that consumers believe that their purchasing power at the pump is decreasing. NACS measures this as self-reported miles per dollar, which fell 5.7% in May to settle at 6.32 miles per dollar, or an average of 15 cents per mile. This marks another survey low for 2014.
Meanwhile, gasoline prices are falling from their spring peak and warmer weather is on the way.
The National Association of Convenience Stores (NACS) conducts the monthly, nationwide Consumer Fuels Survey in partnership with Penn, Schoen & Berland Associates LLC. For this most recent survey, it surveyed 1,113 gasoline consumers online May 6 and 7. During the week that the survey was conducted, the OPIS weekly national average price for gasoline was $3.681 per gallon.