ALEXANDRIA, VA – The extended period of lower gas prices has certainly been embraced by Americans, who also overwhelming say that low prices are good for the U.S. economy, but there are significant variations in what consumers are doing with their savings, according to the results of recent consumer surveys conducted by the National Association of Convenience Stores (NACS).
More than nine in 10 Americans (92%) agree that lower gas prices give consumers more money to spend and 85% say that low prices are good for the U.S. economy. But results across are mixed to show how the economy has benefitted. While income was up 4.5% in 2015, spending only increased 3.4%, according to the U.S. Department of Commerce. Consumers were clearly saving more as a whole, but economic growth for the year was only 2.4%.
More than half of all consumers (54%) are either saving more or paying off debts, according to the NACS consumer surveys. Nearly four in ten (38%) are spending the money on day-to-day essentials, while only 6% are spending the money on items that they otherwise wouldn’t purchase.
That’s not to say there weren’t businesses that prospered with lower gas prices. Hospitality- and travel-affiliated sectors saw strong growth in 2015 as car sales set a record, global air travel surged 6.5% and, for the first time ever, Americans spent more money eating out than in their homes.
“The best news may be for convenience stores, which are closely aligned with both the food and transportation industries and are already benefitting from the growth of these two sectors. Those who shop in convenience stores at least weekly are the highest percentage of Americans (96%) who strongly believe that lower gas prices will have a very strong effect on the economy. And, with convenience stores selling 80% of the gas purchased in the United States, they are well positioned to capture in-store sales from consumers who may spend more in-stores because of lower gas prices,” said NACS Vice President of Strategic Industry Initiatives Jeff Lenard.
Nearly all Americans (93%) also were in agreement that lower petroleum prices will have an effect on the U.S. economy. And they agree (94%) that lower oil and gas prices make it easier to travel and go on vacation. Americans age 65 or older almost unanimously agree (99%).
Some groups felt more strongly about the effect gas prices have on the economy. Consumers ages 18-34 are significantly more likely than consumers over age 65 to agree that lower gas prices will have a large effect on the economy (56% vs. 33%). And urban consumers also are more likely to say low gas prices have a strong effect on the economy than rural consumers (55% vs. 46%).
While consumers say that lower gas prices are good for the economy and will boost travel, but also are concerned about some of the possible negative consequences of a sustained period of lower prices.
Nearly three in four consumers (72%) believe that lower oil prices can hurt investment portfolios, but support in this believe is soft, with only one in five consumers (22%) strongly expressing concern.
Consumers also expressed some concern about the effect that lower gas prices could have on the environment. A slim majority (56%) of consumers say that lower petroleum prices could reduce motivation to buy more fuel-efficient vehicles. Consumers were a little more concerned about how a decrease in fuel-efficient vehicles could affect the economy, with nearly four in five (78%) expressing concern.
“It is estimated that lower gas prices led to an estimated $550 in savings per household in 2015. As gas prices continue to stay low into 2016, it is clear that some segments of the economy are benefitting from consumers’ economic gains. Convenience stores are among the biggest winners, especially as travel remains strong, since they sell both the fuel for vehicles and the snacks and drinks for on-the-go consumers. In addition, their increase in prepare food programs position convenience stores from growth with consumers eating more meals outside of the home,” said Lenard.
NACS, which represents the convenience store industry that sells 80% of the gas sold in the country, conducts monthly consumer surveys to gauge how gas prices affect broader economic trends. The NACS surveys were conducted online by Penn Schoen Berland; a minimum of 1,100 gas consumers nationally are surveyed each month. The margin of error for the entire sample is +/- 2.95% at the 95% confidence interval and higher for subgroups. More complete analysis of consumer spending can be found at http://www.nacsonline.com/YourBusiness/FuelsCenter/Basics/Articles/Pages/How-Are-Americans-Spending-Their-Gas-Price-Savings.aspx