Ted Hurlbut

Gas Prices Could Mean Trouble for Retail

March 9, 2010

FROM RETAILWIRE:
Gas prices are on the rise, and the question becomes, how high will they go and how will it affect consumer purchasing in other areas? Are you concerned that gas prices will rise to the point this summer that it will affect consumer purchases at retail?      [more...]

I think we're all in agreement that fuel prices impact retail sales inversely, but I'm not as casual about it as others. Gas prices have a real dollar impact on retail sales, but just as importantly, have an important psychological impact on consumer sentiment. That sentiment is pretty fragile right now, and $3.00 a gallon gasoline might be an important benchmark. If gas climbed above that level, (and we're not too far away from it) that could have a pretty significant effect on consumer confidence, and retail sales.