Rising gas prices eating into shopping budgets
NEW YORK (Reuters) - Shoppers plan to wait until next year and beyond to spend generously again, a survey on Monday showed, in an early sign that rising gasoline prices could make the spring selling season tough for retailers.
About three-quarters of Americans surveyed by America's Research Group said they were shopping less due to rising gas prices, with more than 62 percent of the participants planning to spend generously only next year or beyond.
Consumer spending accounts for about two-thirds of the U.S. economy.
"The American shopper was extremely cautious before. And now I'd say they are extremely worried," said Britt Beemer, president of America's Research Group.
"What we are going to see happen is that consumers will try and cut back on all discretionary purchases, until finally they are going to have to make a decision at some point what do I really have to give up?" Beemer said.
The national average for a gallon of self-serve, regular gasoline was $3.57 on March 18, according to the Lundberg Survey of about 2,500 gas stations. The current average price is nearly 76 cents above the year-ago level.
Rising gas prices are their biggest concern about the U.S. economy right now, a whopping 62 percent of those who participated in the survey said. Less than 15 percent worried about high unemployment and government spending too.
Despite some recent positive signs for the U.S. economy including data showing a fall in claims for new unemployment benefits and improving factory activity in the country's Mid-Atlantic region, many Americans are still worried about the health of the world's largest economy.
More than 68 percent of Americans who participated in the survey said they did not think that the U.S. economy was back on track.
This spring, more Americans plan to stretch their dollars by shopping at discount chains rather than the pricier department stores and specialty chains, the survey showed, with 753 out of 1,000 survey participants picking discounters as potential shopping destinations for spring.
Even at the lower end, there will be intense competition, Beemer warned.
"Wal-Mart has a new enemy called the dollar stores," Beemer said, adding that dollar stores could win more customers as they offer more grocery.
The telephone survey, using questions asked by Reuters, was conducted March 8-15 and has an error factor of plus or minus 3.8 percent.
(Reporting by Dhanya Skariachan)
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