SOURCE: BIGresearch

June 22, 2006 10:58 ET

High Gas Prices Force Consumers to Rethink Spending

BIGresearch Survey Reveals Shoppers in Both Higher and Lower Income Brackets Are Cutting Back

COLUMBUS, OH -- (MARKET WIRE) -- June 22, 2006 -- 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.

As a result of fluctuating gas prices, are you doing any of the following?

                                       $50K +              < $50K
                                       (2657               (3917
                                       respondents)        respondents)
Buying more store brand/generic
 products                              18.3%               30.5%
Doing more comparative shopping
 online                                18.1%               14.8%
Doing more comparative shopping
 with ad circulars/newspapers          22.6%               27.1%
Shopping closer to home                37.7%               43.4%
Shopping for sales more often          31.3%               38.3%
Shopping more online                   14.4%               11.0%
Taking fewer shopping trips            42.7%               49.3%
Using coupons more                     22.7%               28.8%
Other                                   5.4%                6.0%

*The sum of the % totals is greater than 100% because respondents could
 select more than one answer.
"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."

Additional information on CIA may be accessed by going to: http://www.bigresearch.com and clicking on Complimentary Top Line Findings

To comment on this release visit the BIG research blog: http://whencustomerstalk.blogspot.com.

About BIGresearch

BIGresearch is a market intelligence firm providing analysis of consumer behavior in areas of retail, financial services, automotive, and media. The syndicated Consumer Intentions and Actions Survey (CIA) monitors the pulse of more than 7,000 consumers each month. The syndicated Simultaneous Media Usage Survey (SIMM) monitors more than 15,000 consumers twice each year.

BIGresearch's methodology provides the most accurate consumer information in the industry with a margin of error of +/- 1 percent. Complimentary findings are available at www.bigresearch.com.

Contact Information

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