WHAT IT MEANS AND WHY IT’S IMPORTANT — Gas prices are one of the American economy’s biggest Achilles’ heels, thanks to the high percentage of Americans who depend on automobiles for travel. Thus, retailers have good reason to feel uneasy when gas prices start to rise, and it makes sense that those operating gas stations would offer discounts on fuel as a way to entice customers to their stores.
(THE NEWS: Walmart helps customers save at the pump. For the full story, click here)
According to an April poll in Drug Store News, 92% of respondents — out of a total of 401 — said retailers likely would lose trips if gas prices went above $5 a gallon this summer. And last week, a report by SymphonyIRI found that 4-in-10 consumers were forced to completely eliminate trips to their preferred retailers because of rising gas prices, with many choosing retailers closer to home.
Of course, nobody can really predict what gas prices will do. In fact, they might even be falling. According to the Department of Energy, the average price for gas hit a peak of about $3.97 per gallon during the week of May 9, but it has been declining steadily since then, reaching $3.57 as of June 27. Last year, prices stayed between $2.68 and $2.78 between June and September, compared with a peak of $2.91 in May.
The Obama administration’s decision to release some of the country’s oil reserves will probably help keep gas prices down a bit. In addition, Bloomberg reported that consumer confidence rose to its highest level in 10 weeks as falling gas prices provided consumers with some relief amid a job market still contending with 9.1% unemployment.