High Gas Prices Hit Low-Income Consumers
By George Anderson
High prices for home heating and gasoline were particularly hard on low-income consumers this winter, so projections that the price they will have to pay at the pump this summer will surpass last year’s record highs (even without hurricanes factored in) is just worse news piled on top of bad.
According to the federal Energy Information Administration, the average price for a gallon of gas had jumped to $2.68. With summer quickly approaching and domestic and worldwide demand for fuel going up, predictions are that gas will set new record highs at the pump.
Retailers, especially those catering to consumers on the lower rungs of the economic ladder, expect high energy prices to have a negative effect on their top line sales.
Kiley Rawlins, divisional vice president with Family Dollar said, “Generally, our customers live paycheck-to-paycheck, and if they spend $5 or $10 more at the pump, that’s $5 or $10 less that they have to spend.”
Dollar stores and other discounters have taken steps to capture a greater share of expenditures.
Family Dollar and others, for example, noting that low-income consumers may make less frequent trips to the store when fuel prices go up have been adding food coolers to provide for more of the shoppers’ needs.
Even stores catering to more affluent consumers are not immune to the negative effects of rising energy prices.
Costco, for example, is reported to frequently refuel the gas stations it operates at its club sites. The result, reports the Herald News Daily, is the chain is more likely to experience more frequent price changes than the typical gas station business.
Moderator’s Comment: What impact do you expect rising energy prices to have on retail activity this summer? –
George Anderson – Moderator