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The sudden surge in the price of gas in the United States, up an average of more than 70 cents a gallon from a month ago, has had an adverse impact on retail foot traffic, Placer.ai reports.
Overall visits to physical retailers dropped by 4.3% during the week of March 7, 2022, compared to the equivalent week in 2019, the company found. That is the steepest drop in weekly retail foot traffic over the past 12 months that can't be attributed to the coronavirus pandemic or holiday shopping patterns.
During the week of March 14, the most recent week for which data is available, foot traffic edged up slightly, but not enough to change the overall downward trend, Placer.ai reports.
"Although consumers had largely shrugged off price inflation over the past several months — perhaps due to mass merchants and larger format grocers’ willingness to keep price increases in check — the spike in gas prices appears to be having a marked impact," the report says.
Historically, sudden sizable increases in gas prices have disrupted retail visitation trends, so the recent drop isn't too surprising, according to the report.
So far gas prices and inflation haven't had an impact on overall U.S. retail spending, though the most recent data is from February, as reported by the Census Bureau in mid-March.
In February 2022, retail sales were up 17.6% compared with the same month in 2021, pointing to a recovery from a time when most Americans weren't vaccinated against the coronavirus. Compared with January 2022, however, sales were up 0.3%, suggesting the consumers were adjusting in the face of inflation.
Placer.ai posits a number of behavioral shifts impacting foot traffic. One is that rising gas prices could cause consumers to consolidate their shopping trips, a strategy that favors superstores and large-format grocers. Also, as consumers limit their gas expenditures, they don't drive as far as they used to, and thus retail trade areas may start to shrink.
One retailer in particular stands to benefit from the situation, according to Placer.ai: Costco, which operates about 640 gas stations in North America and has a reputation for lower gas prices. Visits to buy gas at Costco were up almost 160% during the week of March 7 compared with a year ago and still up more than 50% during the week of March 14, presumably also driving traffic to its stores.
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