A fifth of consumers who shop online increased their online buying as the result of higher gasoline prices in September, according to the latest ShopperScape survey from retail consultants Retail Forward, Inc.
Of consumers who shop online, 6.7% said they are shopping online much more as a result of high gas prices, while 15% said they are using the Web for shopping somewhat more. The ShopperScape survey is the second consumer study this fall that shows consumers going online to avoid driving. The first, by Shopzilla.com, showed 40% of consumers increasing their online shopping as the result of higher gasoline prices.
Results of the two studies spell “caution” for retailers as the holiday season approaches. Retail Forward’s Future Spending Index dropped 10% in September to 94, from 104.6 the month earlier. It’s the lowest since the index benchmark of 100 was set in December 2003.
“The economic side-effects of Hurricanes Katrina and Rita have sent a collective shudder through the consumer sector,” said Steve Spiwak, an economist with Columbus, OH-based Retail Forward. “Higher energy costs are the main culprit for the falloff in spending intentions for October. But the storms also have heightened concerns about job security and the direction of equity markets, contributing to the soft near-term outlook.”
Two thirds of consumers reported that they are reducing spending in other areas to pay for more expensive gasoline; 31% said they are spending much less and 36% said somewhat less. Throughout all income categories— market, middle market and up market— than half of consumers said they are spending less in other areas as a result of higher gasoline prices.
In addition, Americans’ charitable contributions to hurricane relief are dampening their consumer spending: 53% of consumers have made a monetary contribution to hurricane relief; 46% of consumers said they have cut back spending elsewhere as a result (6% said quite a bit, 16% somewhat, 25% a little).
The biggest losers in spending will be travel and entertainment, ShopperScape reports. Areas where consumers will reduce their spending, and the percent who cited each one, are:
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- Vacations/travel (45%)
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- Dining out (37%)
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- Entertainment outside the home (32%)
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- Consumer electronics (23%)
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- Clothing, shoes and accessories (23%)
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- Home decorating (22%)
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- Appliances (18%)
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- Other (4%)
In addition, 42% of consumers surveyed said effects of the hurricanes will reduce their holiday shopping; 15% described the impact as “a lot,” 27% said “somewhat.” While 30% said it will not affect their spending, 28% said they are not sure.
