When gas prices retreat, which brands and stores cash in?
A snapshot from 2022 could provide some clues🔍
Want to keep the post Fourth of July celebrations going? Here a good excuse: prices at the pump are down.
For many households across America, this means a little extra money back in the wallet to spend on daily necessities such as food and household products.
Ahead of the Independence Day weekend, the national average for regular gas in the US was down nearly 50 cents from a month ago, at about $3.80 for a gallon of regular gasoline, according to data from AAA. While that number is higher than last year, it’s still down from the national average peak of $4.56 reached on May 21, driven lower by a retreat in crude oil prices.
Although overall gas prices still remain the highest they’ve been in four years, the recent retreat since late May should come as a welcome relief, especially for families on a tight budget who are already anxiously planning for the next big wave of spending that’s coming up — back-to-school shopping.
According to consulting firm PwC, families are expected to spend close to $1,000 this year on clothing, tech products, supplies, books and other needs before the start of the upcoming new academic year in the fall. Almost half (47%) of families said they plan to spend more than they did last year for their children’s school needs.
Spending on clothes and shoes for most families is forecast to average $278 per household, or more than twice what they spend on actual school supplies (such as backpacks, notebooks, binders, pens and pencils). Tech purchases are expected to round out to about $222 per household, according to PwC.
Michael Gunther, senior vice president of research and market intelligence with Consumer Edge, said historical periods of elevated gas prices have shown that discretionary spending takes a hit because consumers have less money left over after filling up their tanks.
The impact is disproportionate, with lower and middle-income households impacted the hardest because they allocate a greater portion of their wallet to gas on a regular basis, he said.
But what happens with spending when gas prices pull back in a sustained way?
For insight, Gunther turned back the clock to four years ago, specifically 2022, when an international conflict - Russia’s invasion of Ukraine — caused the national average gas price in the US to jump and peak near $5 in June 2022, and then fall back down to well below $4 by the end of the year.
When that happened, Gunther told Bagable.com that Consumer Edge US data surfaced which specific brands saw a meaningful increase in consumer spending, and in some cases, those increases even outpaced overall spending in the brands’ specific sectors.
Although the consumer backdrop is different today than it was in 2022, Gunther suggested that a historical analysis could still provide a useful roadmap of which brands and retailers stand to benefit as gas prices ease.
For instance, several athletic footwear brands and clothing chains, such as Dick’s Sporting Goods DKS 0.00%↑, Foot Locker, Under Armour and Nike NKE 0.00%↑, saw a surge in direct-to-consumer spending on the back of falling gas prices in 2022.
“To really assess who benefited (when gas prices eased), each of the names on this chart saw a bigger acceleration in year-over-year growth in spending than their respective sub industry,” Gunther said in an interview with Bagable.com. “In the case of Dick’s Sporting Goods, the increase was a very meaningful outperformance versus the overall retail sporting goods sector.”
Elsewhere, Gunther said off-price retailers, including TJ Maxx TJX 0.00%↑, Marshalls and DD’s Discounts as were notable gainers as well “likely reflecting renewed demand from lower-income households and middle and higher-income bargain hunters as budgets loosened.”
Quick-service, casual dining and select grocery names saw meaningfully improved trends, although some of that may have also been price-driven amid volatile food inflation in 2022, Gunther noted.
Among restaurants that saw demand snap back when prices at the pump cooled were Jack in the Box JACK 0.00%↑, Chili’s Grill & Bar, McDonald’s MCD 0.00%↑, Dunkin’ Donuts and Pizza Hut. Ikea likely experienced shoppers coming back for delayed purchases, he said. The same reasoning could explain a pick up in spending at art and craft supply, and hobby stores such Michaels Stores and Hobby Lobby.
“This look back isn’t necessarily a prediction of what we can expect this time around, but it can give us clues as to which brands and stores are poised to grab more discretionary dollars as gas prices keep coming down in the second half of 2026,” Gunther said.
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