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Motorists Economize To Counter Gas Price
Associated Press photo
Last year, the average household spent $46.72 a week on gas when gas was at its high point.
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Published: April 24, 2008
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BRANDON - In the good old days when gasoline was, say, $2.50 a gallon, rising prices were just a nuisance to the middle class. But with gas now settling at $3.50 a gallon and likely to go higher, evidence is mounting that those families are finally cutting back.
A case in point is Steve Panke, a 28-year-old who does customer service for an automotive credit company in Brandon. Unlike some others, Panke hasn't stopped eating out for lunch. However, he has swapped vehicles with his wife, who drives less than he does. He lets her drive the big SUV, and he takes the small sedan.
"I bought the Ford Expedition because it has a DVD player, rear AC pumping air on the kids and more room," he said. "But now I'm driving the Ford Fusion as my primary vehicle."
According to The Nielsen Co., a consumer research firm, gasoline is eating up a much higher percentage of people's weekly budget. Last year, gasoline fluctuated from $2.11 a gallon to $3.21, Nielsen said, citing government data. Over that time, consumer spending on gasoline ranged from a low of 12 percent of their weekly expenditures to a high of 16 percent.
With the possibility of pump prices hitting $4 a gallon this year, gas may grow to 19 percent of consumers' weekly spending, Nielsen estimates.
People are trying to limit their spending by purchasing fewer gallons at each trip to the gas station. It's not working, Nielsen said, because people are making slightly more trips to the gas station. Last year, the average household spent $46.72 a week on gas when gas was at its high point, compared with $32.02 a week when gas was its low point.
According to interviews with consumers and small retailers in Brandon this week, the middle class doesn't appear to panicking over gas prices., but it is cutting back in small ways, including:
Eating out less often. Restaurants are getting socked by a combination of high gas prices - which are causing people to dine in and food vendors to tack on delivery fees - and the soaring cost of ingredients.
"People that you might have seen two or three times a week, you might see them once a week now," said Marcus Winters, owner of the popular O'Toole's Irish Pub & Restaurant in Brandon.
The Shrimp Boat, a Brandon seafood restaurant, reports flat sales when compared with this time last year. Holding back business is the price of cooking oil, which has tripled during the past 18 months, while prices for dairy and any grain products have also shot up, said co-owner Al Paone. Ingredient costs are rising partly because so much corn is being used to produce ethanol rather than for food and because of a severe drought in Australia.
Buying older vehicles. Partly because of the cost of gas, used car buyers are seeking out older vehicles with higher mileage, said Bob Vallee, a used car dealer with Universal Auto Brokers in Tampa. That has prompted car dealers to move down-market as well and created a flurry of competition among dealers serving the low end of the market.
Dealers are paying more for high-mileage vehicles at auto auctions, to the point that some older cars have gone for "ridiculous" prices, Vallee said.
Conserving on vacations. So far, people don't seem to be forgoing their vacations to Pinellas County, said D.T. Minich, executive director of the St. Petersburg/Clearwater Area Convention and Visitors Bureau. However, they are eating out less often while on vacation and buying less at the souvenir shops.
The big fear is that out-of-state visitors will balk at the higher prices that the airlines are charging because of fuel prices, Minich said.
"When you have a family of four and the tickets are now $300 or $350 where they used to be $200, that's a lot to ask," Minich said.
Not all businesses have been affected.
Tattoos and body piercing would seem to be the ultimate discretionary purchase, hardly a necessity. Yet Atomic Tattoos in Brandon reports that its business is up over last year. Atomic's clientele is primarily 18 to 34 years of age, and "they're going to get a tattoo regardless" of gas prices, said tattoo artist Randy Rodriguez.
Bearing this out, 18-year-old Rosie Wentzel of Riverview showed up Tuesday afternoon at Atomic to get her tongue pierced. She's working longer hours at McDonald's, where she earns a bit more than $7 an hour, to pay for gas.
That's just enough to pay for two gallons of gas, she conceded, but it won't stop her from adding another piercing to her belly-button ring and nose ring.
"You're young and you got to live a little bit," said her friend, Liz Gaver of Riverview.
Reporter Michael Sasso can be reached at msasso@tampatrib.com or (813) 259-7865.
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