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Consumers cut back on spending as gas prices soar.

Date published: 6/2/2007

BY KAFIA HOSH

Rising gas prices have caused some consumers to cut back on their discretionary spending. Cafe patrons are not going for that extra scone with their lattes and shoe lovers are skipping that desired--but not needed extra pair of sandals.

The increasing cost of fuel is affecting 74 percent of consumers, according to a recent survey conducted by BIGresearch for the National Retail Federation in Washington.

Rising gas prices are cutting into consumers' disposable incomes. So instead of getting what they want, many shoppers are only buying what they deem necessary.

"When it comes to getting what you need, consumers still have means to make larger purchases," said Kathy Grannis, spokeswoman for the NRF. "It's really the small purchases that add up."

The average cost of regular unleaded fuel was just above $3 a gallon in the state this week.

Some Virginia grocers, apparel chains and mass retailers have reported customers buying fewer items in their stores since gas prices shot up, according to Laurie Aldrich, president of the Virginia Retail Merchants Association in Richmond.

Consumers are "definitely lessening their spending," she said. "It's hitting us just as badly as everywhere."

Some consumers plan their shopping trips around fluctuating gas prices. That's because of "the uncertainty of where gas prices will be," Grannis said. "Consumers began to adjust really quickly to the notion that gas prices could go up."

Lorraine Walton of Stafford carefully considers where she needs to go before leaving the house for an errand.

"It certainly makes me think twice before I make an extra trip somewhere," she said.

She also tries to make the best use out of each shopping trip.

"I can't say that I have reduced the number of items that I purchase," Walton said. "If anything I might buy more at one time."

To save gas, Spotsylvania resident Deborah Johnson crams her grocery shopping in between other errands. "Rather than maybe doing it on the evenings after work, I'll do it sometime during the weekend," she said.

Johnson trimmed her spending in other ways too. She use to spend up to $50 a week on fast food runs for her son and nieces. But it now costs Johnson about $40 to refuel her GMC Sonoma, and so her family has cut back on dining out.

Retailers are also feeling the pinch of rising fuel costs. They're being forced to pay higher prices to transport merchandise and even suppliers are raising prices to offset shipping costs.

Johnson said she's noticed grocery prices creep up.

But Grannis said retailers are not necessarily passing the added transportation costs onto consumers.

"This is something retailers build into their budgets well in advance," she said.

Kafia Hosh: 540/735-1977
Email: khosh@freelancestar.com

Here are ways consumers are offsetting the cost of gas. 40 percent are taking fewer shopping trips. 38 percent are shopping closer to home. 31 percent are dining out less 24 percent are spending less on clothing 20 percent delayed major purchases such as a car or furniture. Source: NRF

Date published: 6/2/2007