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Looming gas prices actually could help retailers

BY Michael Johnsen

WHAT IT MEANS AND WHY IT’S IMPORTANT — To say that the impact of high prices at the pump this year is not as bad as it was in 2008 may be a testament to just how bad it was in 2008. As long as the price-per-gallon hovers above or below that magical $4, it’s still plenty bad, and there still are plenty of people who are changing shopping behaviors because of it.

(THE NEWS: Nielsen finds consumers are less worried about rising gas prices than in 2008. For the full story, click here.)

An Associated Press/GfK poll released last week determined that rising gas prices will cause “serious” hardship for as many as 41% of Americans. Almost 3-in-4 acknowledged $4-per-gallon-plus at the pump will cause at least some hardship.

But where there’s pain, there’s gain. So bad news for the consumer may not be bad at all for the savvy retailer. Instead of lamenting how promotional they may need to become, those retailers are busy figuring out how to convince their consumers that one-stop shopping, along with savings at the pump, can be had at their locations.

Such retailers as CVS/pharmacy and Weis Markets are luring customers into their respective boxes, for example, with promises of significant relief at the pump.

CVS/pharmacy is offering a $10 gas card each week for customers who spend $30 on specially marked items. For an ExtraCare cardholder who owns a sedan with a 12-gallon tank, that could represent savings of 84 cents per gallon, if not more.

And Weis Markets already offers loyalty card holders 10 cents off a gallon of gas for every $50 worth of groceries purchased. And Weis recently upped that ante by offering a $1 off per gallon of gas with a new or transferred prescription. That offer is good through July 23, or practically the entire summer, and the gas savings are redeemable at most Weis or Sheetz locations.

As of last Friday, the average cost of a gallon of regular gasoline was $3.886, down from $3.905 Thursday, according to AAA’s "Daily Fuel Gauge Report."

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Gas prices put pressure on consumers

BY Michael Johnsen

WASHINGTON — An Associated Press/GfK poll released Friday determined that rising gas prices will cause “serious” hardship for as much as 41% of Americans.

Almost 3-in-4 adults acknowledged that $4 per gallon or more at the pump will at least cause some hardship.

By income, 63% of those with annual household incomes more than $50,000 said rising prices are now causing them financial hardship, up from 55% in March. More than 75% of households with incomes of less than $50,000 continue to report financial hardship. The share of seniors expressing financial hardship over gas prices hit 76%; it was 68% in March, AP reported.

As of Friday, the average cost of a gallon of regular gasoline was $3.886, down from $3.905 Thursday, according to AAA’s "Daily Fuel Gauge Report."

Other polls have made similar determinations. AAA’s survey of intended Memorial Day travelers found that 6-out-of-10 said rising gasoline prices would not impact their travel plans. Of the remaining 4-out-of-10 travelers who said rising gas prices would impact their travel plans, 70% will economize in other areas, and the rest will take a shorter trip or travel by an alternate mode of transportation.

AAA projected 34.9 million Americans will travel 50 miles or more from home during the Memorial Day holiday weekend, a slight increase of 0.2% — or 100,000 travelers — from the 34.8 million people who traveled one year ago. “Memorial Day travel experienced a gain of more than 14% in 2010, and this year we expect to add slightly to that gain due to an increase in air travel and an improvement in the overall domestic economic picture,” AAA president and CEO Robert Darbelnet said. “Some travelers will compensate for the higher fuel costs by cutting other areas of their travel budgets.”

According to the AAA survey released Thursday, the average distance traveled by Americans during the Memorial Day holiday weekend is expected to be 792 miles, which is 27% greater than last year’s average travel distance of 626 miles. Air travel is expected to gain a larger share of overall travel and likely is the cause of a substantial increase in the average travel distance compared with a year ago. Median spending is expected to be $692, a decrease of 14% from $809 last year.

The Memorial Day holiday travel period is defined as Thursday, May 26 to Monday, May 30.

The AP/GfK poll found that the increase in gas pricing most likely will impact discretionary spending, with 72% reporting they would have to cut back on other expenses in an effort to accommodate the rising fuel costs. As many as 66% reported they would drive less; and 48% suggested they would change vacation plans.

The Associated Press/GfK Poll was conducted May 5 to 9 by GfK Roper Public Affairs and Corporate Communications. It involved landline and cellphone interviews with 1,001 adults nationwide and has a margin of sampling error of plus or minus 4.2 percentage points, AP reported.

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Report: More retailers using social media to attract e-commerce customers

BY Michael Johnsen

NEW YORK — More retailers are using such social media venues as Facebook as an entry point into their e-commerce sites, according to the Wall Street Journal, which cited JCPenney and GNC as examples.

Facebook, the report said, creates a new shopping dynamic, enabling consumers to “share” what they’ve bought with friends in real time.

For now, the revenue stream is a trickle, WSJ reported. But expectations are that this potentially could provide a strong flow of revenue in the near future.

Facebook doesn’t charge retailers a fee to add the shopping function, WSJ reported, nor does it take a cut of transactions that occur on its site. However, companies typically outsource the project to developers that charge at least $10,000 to add the feature.

For the full story, click here.

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