Insight Flash: Gassing Up Consumer Spending
Updated: October 21, 2024
Over the last few months, gas prices have begun to fall, providing much relief for American consumers who had seen fuel take up too much of their spending. Which businesses are seeing the biggest gains from falling prices as shoppers shift their spending, and which could see additional revenue if gas prices fall even further in the months ahead? Our data is showing the majority of the benefits are going to businesses that have recently suffered from inflation in another category – discretionary food. Both fast-grab packaged snacks and fast food are the most likely to be benefitting from gas price relief.
Since early August, our CE Transact US data has picked up on the decline in fuel prices in both the total spend and average ticket metrics. The average ticket price per transaction at gas stations has dropped from ~$27 in the first half of July to as low as $25.44 at the end up September. Overall spend at Convenience and Gas Stations has declined by more than 10% since early August. However, since the end of Q1, the drop in average ticket has been larger than the drop in overall spend, implying more transactions with a lower average ticket, showing consumers are taking advantage of some of the price declines to do more driving.
Spend Declines and Average Ticket Decreases
Looking specifically at consumers who are regular gas purchasers, filling up their tanks at least weekly, there are many brands that have seen a significant increase in their relative share of wallet.
Some of the extra dollars in shopper pockets are going to recreational activities, with DraftKings Sportsbook seeing an increase of 0.22x times more spend among gas customers than the overall panel and hotel chains seeing large gains as well (Hyatt, Wyndham, and Home2Suites). Frequent refuelers are also spending more than usual on Home & Garden from merchants as varied as Sleep Number, Nebraska Furniture Mart, and SiteOne. However, the most common increase in spend among regular drivers seems to be in these shoppers seeing a lower total at the pump and immediately going inside the convenience store arms of 76, ExxonMobil, ConocoPhillips, and Arco to treat themselves to a beverage or a snack.
Year Over Year Gains in Relative Share of Wallet
If fuel prices continue to stay down, lower refill totals may go from being a pleasant surprise to a more enduring expectation. Rather than the immediate reaction of spending the extra money on a nearby treat, where else might shoppers spend their newfound surplus?
Looking at where drivers tend to go on the same day they shop in Convenience/Gas stores, the data shows that cheaper gas may end up driving more fast food spend. After filling up, drivers are most likely to visit Hardee’s, A&W, or Taco John’s, and having more discretionary dollars is likely to lead to more trips and/or larger purchases at these chains.
Brand Basket: Gas Price Declines Drive Return to Discretionary Food Purchases
Recent food price inflation has forced consumers to make tough choices, sacrificing some edible treats like gas station snacks or fast food to afford more expensive basics. However, when prices come down in other categories like gas, shoppers are quickly returning to these purchase categories when they have just a few extra discretionary dollars in their pockets.
Continued gas price declines are likely to offset food price inflation still further, leading to even more spending in the category.
Originally Published: March 17, 2022
One of the unfortunate fallouts of Russia’s war with the Ukraine is rising gas prices in the US as oil embargoes take root. Which US consumers are most affected and which businesses could see the biggest decline in sales as consumer discretionary wallets shrink? In today’s Insight Flash, we analyze gas price increases to date, which demographics and geographies are most affected, and which companies are most likely to feel fallout effect based on cross-purchase rates.
Since the beginning of March, our CE Transact US data has reflected the increase in fuel prices due to Russian oil embargoes. The average ticket price per transaction at Convenience/Gas outlets has risen to $34.77 in the seven days ending March 10, up 50% from the year prior. This takes into account the fact that people maybe be topping off their tanks to less than full to avoid high payments at the pump. Total spend has increased to twice the levels of January 1, 2019, with price and return-to-work driving substantial increases from COVID levels.
Spend Growth and Average Ticket Increases
These increases are most likely to affect low-income shoppers, younger shoppers, and those living in the Midwest. In the last year, those making under $60,000 spent 5.1% of their total tagged wallet at Convenience/Gas stations, versus only 3.0% for those making over $150,000. Similarly, those aged 18-24 spent 6.1% of their total tagged wallet at Convenience/Gas versus 3.7% for those ages 65+. Finally, those in the Midwest spend 5.1% of their tagged wallet versus 4.5% in the South, 3.4% in the Northeast, and 3.3% in the West.
Share of Wallet by Demo and Geo
Although cross-shop is generally high with a large percentage of the nation buying gas at some point in the week or month, CE data allows for a brand basket analysis of companies most frequently cross-shopped on the same day as fuel purchases to understand which retailer may be most impacted by rising gas prices. Many travel brands such as hotels and rental cars show up on the list, but further analysis of more consistent refueling shows that Limited-Service Restaurants such as A&W and Hardee’s may suffer as a more expensive trip to the pump leaves fewer extra dollars for an on-the-go burger.
Brand Basket
Consumer Edge is the leading provider of alternative data for consumer spending and the sole source of global revenue signals. To gain insights into convenience & gas market intelligence, and trends, request a demo of CE products.
