U.S. consumers paid 24 percent more dollars to purchase 1.7 percent fewer gallons of gas in 2011, according to The NPD Group, a market research company. The increased spending represents $76 billion more going into gas tanks compared to the previous year.
The results of the 2011 NPD Motor Fuels Index, which tracks consumer motor fuel purchasing behavior and attitudes, were reminiscent of 2008 when the national average price for a gallon of gasoline remained above $3.00 for 12 months (November 2007 to October 2008). During that time, miles driven decreased by 55 billion miles. Prices again crossed the $3.00 threshold in December 2010 and have remained above that level to date. Miles driven never fully recovered from the 2008 declines, and consumers cut back another 36 billion miles through December 2011.
“Consumers continue to modify driving patterns to purchase fewer gallons, but it isn’t enough to offset price increases at the pump,” said David Portalatin, motor fuels analyst at NPD. “There’s no doubt that the consumer is losing share of wallet at the pump despite trying to reduce consumption.”
With more money going toward gas, it leaves less to spend on other things. For example, NPD’s Convenience Store Monitor, which tracks the consumer purchasing behavior of more than 51,000 U.S. convenience-store shoppers, reports that total convenience store consumer traffic declined 4 percent in 2011. This effect was more severe at oil company-branded outlets that are typically more dependent on gasoline sales to drive customer traffic. Traditional convenience chains that are more diversified in their food and beverage offerings were better positioned to weather the trend, according to Portalatin.
According to the most recent Motor Fuels Index findings, through March 2012, consumers have already cut back another 1 percent on gallon purchases but have spent 9 percent more for those gallons compared to the same time period a year ago. “Gas prices have continued to increase into the spring of 2012 with more increases expected,” Portalatin said. “And, while seeing $3-plus on the pump is no longer the shock it once was, there is still only so much money in the wallet, and something will need to give in order to fill the tank.”