NEW YORK -- New data shows consumers are taking the recent lower gasoline prices as an opportunity to treat themselves, according to a survey of convenience-store retailers conducted by Wells Fargo Securities.
In general, as a result of lower gas prices, “consumers have extra money in their pockets which is leading to more frequent visits as well as increased purchases,” convenience retailers told Wells Fargo.
Survey respondents estimate that higher consumer disposable income drove an incremental 3% in foot traffic in stores during the fourth quarter of 2014, according to the survey report issued by analyst Bonnie Herzog. "However, interestingly, this was not a universal theme as over half of our survey respondents indicated that lower gas prices did not have any incremental positive impact on non-alcoholic beverage sales."
Instead, according to the report, lower gas prices are leading consumers to “trade up” and “treat themselves” without necessarily increasing frequency of visit (traffic) or quantity of items purchased (basket size) in many stores.
The data tells the story:
Related retailer comments:
- “Lower prices had impact across all categories, [and] beverage saw a slight benefit. I believe the biggest beneficiary was craft/imports not non-alcoholic.”
- “I think gas prices and steady gains in employment have made people feel a little better and in turn maybe treat themselves more than they have in the past.”
- “Consumers may be trading up to greater purchase per transaction; however, lower gas pricing does not appeared to have helped drive traffic.”
- “I don't believe that lower gas prices impact our conversion rate of consumers that purchase gas only vs. customers that buy gas and come into our stores. We hear the consumers have more discretionary spending funds due to lower gas prices. Not sure if this translates into increased beverage sales."
Source: Wells Fargo Securities LLC
Related retailer comments:
- “Consumers have extra money in their pockets, which is leading to more-frequent visits, as well as increased purchases.”
- “Packaged beverage margins are significantly higher than last year.”
- “There has been no favorable impact on overall margins.”
- “All around, great story for us as customers have more disposable income and they visit more frequently these days.”
- “Using gas to drive traffic, we are still not seeing consumer drive more as volume continues to decline.”
Source: Wells Fargo Securities LLC
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