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SURVEY: MOST KEEP BUYING DESPITE GAS HIKE

BY SASCHA BRODSKY

Lower-income shoppers are spending less money, and downtown retail districts are seeing less business, thanks to rising gasoline prices, according to a survey commissioned by ICSC. Across all income groups, however, 56 percent of respondents said paying more for gas has had no real impact.

Overall, record-high gas prices have about 40 percent of U.S. consumers driving less frequently, says the survey of more than 1,000 adults. The shopping format that continues to be affected most by a drop in store visits is downtown shopping areas (63 percent), while neighborhood shopping centers are the least affected (50 percent).

Despite some overall decrease in the frequency of shopping, 59 percent of households said they have not reduced spending over the past month on such items as clothing, shoes, jewelry, consumer electronics, beauty services or “nonessential” items. But 63 percent report a decrease in dining out. Consumers who did spend less were split evenly between those that cut spending considerably (20 percent) and those that did so modestly (21 percent).

Fifty-seven percent of consumers earning less than $25,000 a year said they had cut back on their “discretionary” purchases, the survey says. More specifically, 54 percent of these low-income households reported they are driving less, and between two-thirds and three-quarters said they are going out to eat or to shop less often than before.

Of households earning $75,000 a year or more, 31 percent reported scaling back on their discretionary spending as a result of gas prices. Among these, 32 percent have cut back on driving, while one-third to one-half said they eat out or go shopping less frequently.

Depending on the amount of driving, consumers are paying on average $6 to $8.10 a week more for gas relative to last April, when the price of a gallon of regular rose to $2.22, according to the U.S. Energy Department.

“Over the past year, there has been about a $14 increase in average weekly earnings, which is a key offset and reason why the economy and consumer spending has seen limited negative impact from higher consumer expenditures on gasoline,” said Michael P. Niemira, ICSC’s chief economist and director of research. “The most recent ICSC survey found 57 percent of households described themselves as more efficient shoppers — making fewer visits per store, but buying more or combining shopping trips better — as a way of coping with the higher gasoline cost. This compared with 52 percent reporting that in May 2004.”

Opinion Research Corp. conducted the survey of 1,020 consumers 18 and older in the continental U.S. between April 1 and April 3, 2005.