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Consumers get gas pains
Record prices at the pump mean less money for eating out, vacations, clothing: retail survey.
May 18, 2004: 2:40 PM EDT

NEW YORK (CNN/Money) - Nearly a third of Americans are cutting back on vacation and travel and 27 percent are cutting back on eating out because of record high gas prices, a retail industry survey said Tuesday.

The National Retail Federation (NRF) said in its "2004 Gas Prices Consumer Intentions and Actions Survey" that while nearly half of consumers polled said they do not believe rising prices at the pump will "significantly" impact their spending, others are turning more cautious.

Nearly one in three consumers, 31.6 percent, plan to trim or give up their travel and vacation plans, the report said.

Another 21 percent are spending less on clothing and 16 percent said they're trimming their grocery purchases. Some consumers are also delaying major purchases like cars, TVs, and furniture.

"Retailers know that when consumers are forced to spend more of their disposable income on gasoline, they will scale back spending in other areas," NRF CEO Tracy Mullin said in the report.

"Ultimately, higher prices at the pump act as an additional tax on consumers, and consumers don't like to be taxed."

How much people are cutting is linked to income, the survey found.

While more than half of consumers, 52.9 percent, with household incomes greater than $50,000 said they were not likely to feel a big impact from rising gas prices, a little more than a third, 38.1 percent, with income below $50,000 said the same.

"Even if consumers' wallets aren't completely drained by the rising cost of fuel, an increase in gas prices has a psychological effect," said Phil Rist at consumer research firm BIGresearch, which conducted the survey for NRF.

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"Though some consumers are only paying $4 or $5 more a week to fill up their cars, many will be more conscious of what they spend in other areas to make up for the small, but significant, loss."

Meanwhile, higher gas prices could also dent spending over the Memorial Day weekend. The survey said consumers between age 25 to 34 will be the most affected, with about 44.3 percent planning to cut back.

The survey also found that despite the rising cost of gasoline, only 4.2 percent of consumers have increased carpooling.

The survey of 6,899 people was conducted May 5-13, and has a margin of error of plus or minus 1 percent.  Top of page




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