Two-buck gas pumps up sales of package goods, helps supermarkets

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High gas prices are good for package-goods sales and supermarket traffic. But only up to a point.

Consumer package-goods sales rose 2.5% year over year from February through July, when gas sold for $2 to $2.25., according to Information Resources Inc. data from consumer panels covering most outlets where such products are sold

Package-goods sales declined 0.3% last fall and winter, when gas prices ranged from $1.75 to $2 a gallon, according to IRI.

And once prices edged past $2.25, sales slowed again to 1% growth.

The effect spans food and non-food categories, and IRI believes it stems from consumers going out less for dining or entertainment, instead spending their money at food, drug and mass-merchandise stores.

The report cites an earlier one in August by Technomic showing 18% to 19% of consumers spend less at quick-serve and family restaurants because of gas prices.

Not surprisingly, then, IRI found frozen entrees, pizzas and cold cereal among the biggest gainers since gas topped $2. Beer, wine and spirits all improved trends markedly, too, as did cookies.

Strangely, household and personal care saw a more pronounced effect than some food categories.


IRI attributes that to people simply spending more time in stores or using savings from going out to care more for their homes or themselves.

Other surprise beneficiaries of higher gas prices include supermarkets, which have struggled for years, but have seen positive sales trends since gas topped $2. Drugstores also have reversed declines as gas prices rose.

But the positive impact has waned almost everywhere since average prices topped $2.25 in July, particularly at club and dollar stores, according to IRI.

Dollar stores are hurt because their consumers have the lowest income on average of any channel.

Club-store consumers skew upscale, but are also very price-conscious and may be less willing to drive generally longer distances to club stores just for food and sundries, Ms. McCusker said.

Overall, however, such major dollar- and club-store retailers as Dollar General, Family Dollar and Costco have continued to report double-digit sales gains in recent months.

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