Gas savings goes to groceries

Under normal economic circumstance, the rapid decline in gas prices would be good news for retailers. However, given the current state of affairs with rising unemployment leading to fear of job loss and restrained spending, money saved at the pump is being channeled into food or savings, according to a new study.

The retail analytics firm Precima looked at how Americans are using the money saved on gas and found that 48% are spending it on groceries and 42% are saving it. Holiday gift buying was mentioned by 37% of those surveyed, while 30% said they were paying off credit cards.

The gas-to-groceries switch is even higher among those survey respondents who said they have suffered a direct financial loss during the recession. Of those, 55% said they are spending gas savings on groceries, and for those whose annual income is less than $35,000 the number is 59%. Conversely, 34% of retirees said they are spending gas savings on groceries. The number fell to 29% for those whose annual income exceeds $100,000.

In another significant finding from the survey, nearly two-thirds of respondents said the recession is changing the way they plan their grocery trips, particularly in regards to pantry-loading. Less than 27% of consumers said they can no longer afford to stock up on food and now buy only what they need week to week. Another 35% said they stock up more than they used to, but only when items are on sale.

Of the 65% of respondents who said their stocking habits have changed, 5% said they stock up more, 54% said they stock up only when items are on sale and 41% no longer stock up at all.