Fuels

Is $4 the New $3?

While some would change holiday driving plans over higher gas prices, many would not
HOUSTON -- As the national gallon-of-gasoline price average hovers cents below the $3-a-gallon level, historically the tipping point at which consumers adjust driving behaviors, market research firm The NPD Group asked, if gasoline prices reach the $3 mark by the winter holidays, will consumers alter their travel plans? Click through to view the findings.

According to a holiday survey conducted this past September by NPD to determine Americans' shopping, spending, traveling and dining intentions for this holiday season, 63% said that they would not be changing their holiday [image-nocss] travel plans in light of gasoline prices. The survey also found that fewer people would be staying home this year than last year when 30% of respondents planned to stay home versus 27% who said they would be staying home this year.

"After surviving $4-a-gallon gasoline in 2008, consumers have gradually begun to return to normal driving behaviors, but any sustained price increase over $3-a-gallon would likely cause these numbers to start trending back in the other direction," said David Portalatin, a motor fuels analyst with NPD. "Sustained gas price increases over the next month could cause some to reconsider winter holiday driving travel."

NPD's motor fuels market research, which continually tracks consumer motor fuel purchasing behaviors and attitudes, finds that at the $3-a-gallon mark consumers begin making short-term adjustments to their driving behaviors by driving less, idling less, driving slower and carpooling. Since gas prices have been below $3-a-gallon, consumers are gradually reversing their short-term driving adjustments. For example, in 2008, 60% of consumers said they were driving less, and 33% said they were driving less in 2010.

Considering the price of gasoline over the past year, which of the following have you actually done?
Source: The NPD Group/Automotive Aftermarket Outlook Survey

"We may expect to see these types of driving adjustments at the holidays if gas reaches $3-a-gallon by mid-December," said Portalatin. "But if holiday plans have already been made by that time, consumers will more than likely stick with their plans."

The NPD Group is a leading provider of consumer and retail information for a variety of industries. More than 1,800 manufacturers, retailers and service companies rely on NPD to help them drive critical business decisions at the global, national and local market levels. It helps clients to identify new business opportunities and guide product development, marketing, sales, merchandising and other functions. Information is available for the following industry sectors: automotive, beauty, commercial technology, consumer technology, entertainment, fashion, food and beverage, foodservice, home, office supplies, software, sports, toys and wireless.

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