High Gas prices force consumers to rethink spending.

According to BIGresearch’s June Consumer Intentions and Actions Survey (CIA), consumers are making difficult choices to offset the rising cost of driving. When asked if fluctuating gas prices have impacted their spending, 75.3% of nearly 7,500 respondents agreed. While that may come as no surprise, the survey results raise a major red flag for business and retail.

“It’s not just people making less that $50K per year who are rethinking their household spending,” said Joe Pilotta, VP of Research for BIGresearch. “People making over $50K per year are also feeling the pinch of gasoline price hikes and are cutting back in many of the same ways.”

So where are they cutting back? The top three areas listed for both income groups included driving, dining out and vacation/travel. Both groups also indicated that inflated gas prices have caused them to spend less on clothing and groceries as well as delay major purchases such as a car, electronics or furniture.

“With the continued impact of higher gas prices, shopping has become increasingly difficult,” said Pilotta. “With gas costing some drivers in excess of $40-50 per week, consumers have to think more realistically about adding the cost of driving to their household budget than in the past—and coming up with ways to help offset the blow.”

The CIA survey showed that the leading gas/money-saving strategies employed by consumers making above and below $50K per year include taking fewer shopping trips, shopping closer to home and shopping for sales more often.

“These consumer trade-off strategies mean retailers and manufacturers may be facing difficulties in forecasting sales and projecting inventory,” said Pilotta. “As consumers strive to save money, they are more willing to make sacrifices, like buying house brand products over name brands, for example. To stay on par and remain competitive, many companies will need to look toward coupon programs, both online and off, as well as other value pricing strategies to make a shopping trip worthwhile for consumers who are driving and spending less.”

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