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Fuel prices changing US consumer habits
A new study from The Nielsen Company finds that 49% of US consumers are reducing their spending to compensate for rising fuel prices, up four points from June 2007. The study found that 70% of consumers are combining shopping trips and errands, and 41% are eating out less, and 39% staying home more often. The study has relevance here, as the SA fuel price rises.
Todd Hale, senior vice president of Consumer Shopping & Insights, said "... Large numbers of consumers eating out less and staying home more... signal a tough year for some restaurants... there may be an opportunity for consumer packaged goods (CPG) manufacturers and retailers to find... growth in... at-home meal solutions and at-work meals."
The survey finds that record-high fuel prices likely contributed to 2007's less-than-stellar holiday sales season. The study found that 60% of consumers surveyed said they had less money to spend during the holidays due to increased fuel prices.
Hale continued... "... our research shows a jump in consumers shopping on the Internet as a way to deal with high fuel prices... a wake-up call for manufacturers and retailers alike to step up their ‘direct-to-consumer' efforts and utilize the Internet to communicate directly with consumers in 2008... "
The survey shows that 27% of consumers are reacting to fuel prices by shopping more at super centres, or megastores and big-box stores, where more items needed are in one store.
"Nearly a third of households still travel 11 miles or more to a super centre, and high fuel prices will likely reduce the number of quick trips these households make," said Hale.
The study found that 25% of consumers are using coupons to save money, up from 20% in June 2007. A total of 23% of consumers indicate they will buy less expensive grocery brands to deal with higher fuel prices, signalling a possible boost for private label or store-brand products and lower-priced branded products.
(The survey was conducted in December 2007, when regular fuel averaged $3.06)
"2008 will likely be a challenging year for US consumers and the economy as a whole as we grapple with growing inflation, credit card debt, declining house values - - as well as expectations for fuel to hit $3.40 by spring," said Hale. "Manufacturers and retailers need to be alert to the fact that consumers are looking to save by altering where they shop, how they shop and what products and brands they buy. Value, convenience and competitive pricing will be more important than ever in the year ahead.
For more information, please visit, www.nielsen.com.
