A survey of more than 3,000 U.S. consumers by Precima, the Toronto-based unit of Alliance Data's LoyaltyOne marketing firm between Nov. 28 and Dec. 8 found that 48% of people planned to spend their gas savings on groceries, followed by 42% who plan to put the money in savings. Some 37% said they'll use it to buy gifts and 30% plan to pay down credit card debt with it. Some 10% who plan to spend it on entertainment.
Gas prices in the U.S. have declined as much as 60% since mid-September, saving an average household $175 to $200 monthly.
Revisiting some aisles
"With relief at the pump, consumers are returning to some of the aisles they may have foregone in recent months, said Brian Ross, general manager of Precima, in a statement, who said the research dovetails with prior findings by the company that consumers are eating at home more.
With gas prices having fallen more sharply and faster in the Midwest and Southeast -- strongholds of Walmart, which has relatively few stores in mass-transit-using big cities such as New York and Chicago -- that retailer's consumers appear to be benefiting disproportionately, just as they were hurt more when prices rose.
In the Precima survey, consumers who said they'd suffered a direct financial loss during the recession or whose annual incomes were under $35,000 were most likely to use gas savings on groceries. Retirees and those making more than $100,000 were least likely to use their savings on groceries.
Stocking up during sales
The survey also found the recession is changing the way consumers plan their grocery trips, with 27% of consumers saying they can no longer afford to stock up on food. Another 35% said they're stocking up more, but only on sale items.
More evidence that people aren't using gas savings on gifts comes in Deloitte's annual holiday survey, which found consumers on average plan to buy one fewer gift (22 vs. 23) and spend $37 less on gifts ($532 vs. $569) than last year.
It's actually the third consecutive year that consumers' spending plans for gifts have declined in the survey, but the steepest drop in any of the past three years. If there's any consolidation, retail sales actually increased each of the prior two years, despite consumers say they were pulling back.
Home-improvement, socializing spending down
But other areas of holiday spending took a bigger hit in the Deloitte survey, with people planning to curtail holiday spending on things such as home improvements, socializing away from home, entertaining at home and charitable donations more sharply than gift spending in the Deloitte survey.
The survey of more than 13,000 consumers found people planned to reduce all forms of holiday-related spending by an average of more than $500 to under $1,500.