Doug Stephens

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...]

In the short term, yes, high fuel prices will adversely impact retail sales. And for retailers like Walmart who depend on vast amounts of fuel to transport goods from around the world, it will severely impact the business model.

In the long-term however, I think we'll see positive change come as a result.

In his book, $20 Per Gallon: How the Inevitable Rise in the Price of Gasoline Will Change Our Lives for the Better, author Christopher Steiner describes many of fundamental choices and behaviors that will change as a result of escalating fuel prices. Some, like the death of Hummer, we're already seeing. Shipping costs could go a long way to leveling the playing field for domestic manufacturing, returning jobs and a degree of prosperity to some of North America's hardest economically hit regions.

Everything from where we live to how we to how we grow food and how often we travel would ultimately have to change. The net result could be a vastly more sustainable situation than if gas prices remained at current levels.