Nielsen graph: gas prices and spending
In the summer of 2008, banks were sinking, gas prices were soaring, and the recession was looming. Two-and-a-half years later, the banks have recovered (mostly), the recession is over (mostly), but gas prices have inched back toward record territory.
After a steep price drop in the autumn of 2008 -- from $4.11 per gallon to $1.61 per gallon -- gas prices have been steadily on the rise. Given today's average of $3.05 per gallon, research powerhouse Nielsen's annual survey about lifestyles and fuel prices demonstrates some interesting trends among consumers.
In the survey, Nielsen asked Americans about four habits: eating out, brand-consciousness (at the grocery store), coupon usage, and running errands. Here's what the researchers found:
- The first habits consumers change in the face of rising gas prices relate to driving. When prices were at their highest in June of 2008, nearly 80% of respondents said that they were driving smarter and more strategically by combining trips. That number tapered off the moment gas prices began sliding.
- Food is the other major consumer cutback -- particularly, the frequency with which people eat at restaurants. That's not surprising: even though the cost of organic foods can run a pretty penny, cooking in is widely understood to be cheaper than eating out. (This may help explain the current popularity of TV shows, websites, and apps devoted to food and cooking.)
- Consumers are slightly less interested in using coupons or in switching to less-familiar brands at the grocery store. We don't have all the data on those two habits, but we know that they both come with certain class connotations (e.g. generic brands are often seen as less desirable than other brands), and they can negatively impact comfort. We imagine more consumers would likely change habits in both areas if gas prices went high enough. That said, it's interesting to note that of all four habits, coupon usage is the only one that's continued to increase.
Nielsen didn't ask about car-buying habits on this particular survey, but we imagine that more consumers will consider smaller and/or more fuel efficient vehicles as gas prices increase. (Remember, SUV sales plummeted in 2008 and bounced back almost as soon as prices dropped below $2 per gallon.) So, maybe all those compact rides we've seen at the 2011 Detroit Auto Show have a future.