ALEXANDRIA, Va. -- High gasoline prices have changed consumers' overall spending behavior more than any other economic factor, and that is particularly true at the pump, where consumers say they will significantly change their purchasing behavior to save as little as one cent per gallon, said a new report from the National Association of Convenience Stores (NACS) examining consumer perceptions and behaviors.
On February 2, NACS released findings from the 2008 NACS Consumer Fuels Report as part of the association's annual gasoline price kit, which examines conditions and trends that could [image-nocss] impact gasoline prices. C-stores sell more than 80% of the gasoline purchased in the United States.
Nearly half of all consumers polled say that high gasoline prices have significantly affected their spending behavior, nearly double that of any other economic concern, according to a survey commissioned by NACS.
Consumer concerns over high gasoline prices have significantly changed how consumers shop for gasoline. Today, consumers consider price more important that location by nearly a five-to-one margin (73% to 16%).
Not only will most consumers shop based on price, nearly one in three will inconvenience themselves to save as little as three cents a gallon: 51% of consumers said they would take a left-hand turn across a busy intersection and 29% would drive 10 minutes out of their way. The average fillup is in the 10- to nearly 12-gallon range, meaning that consumers say they will significantly change their purchasing behavior to save about 35 cents on a $35 fillup, based on gasoline prices at approximately $3 per gallon. This consumer price sensitivity drove retailer gross margins on fuel, on a percentage basis, to their lowest level ever in 2007.
While most consumers currently indicate that they haven't significantly changed their driving habits, they do say that if gasoline prices increase they might change their behavior. The mean consumer response was that $3.71 per gallon would make consumers significantly cut back their fuel purchases.
Consumers also think that retailers make considerably more profit than they actually do. When asked how much retailers make in profit—after subtracting costs, including rent, insurance and all other fees—consumer response averaged 65 cents, more than 60 cents higher than actual retailer profits, which average one to two cents over the course of a year. A stunning 16% of those surveyed think that retailers make at least $1 per gallon in profit. While consumers overstated retailer profits, they also thought that a "fair" profit was 59 cents.
While consumers think that retailer profit on a gallon of gasoline is about 22% of the cost (it's actually less than 1%), consumers don't blame retailers for high prices. The corner gas station/c-store is not perceived as the cause of consumers' pain. When given nine possible explanations for higher prices, consumers said that gas stations increasing profits was the least important factor. And when asked to pick the main reason why gasoline prices increase, only one in 25 consumers said it was from gas stations profiteering.
The 2008 NACS Consumer Fuels Report is based on 1,215 telephone interviews with adult Americans from December 26, 2007, to January 4, 2008. Full data tables and other resources can be found on the NACS Web site at www.nacsonline.com/gasprices.
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