At Last, A Beneficiary Of High Gasoline Prices

When the average household economizes by eating out less often, this generally doesn’t mean its members consume less food. So, how do they take up the slack created by the reduction in restaurant meals? A new study by Information Resources Inc. points to the obvious-but-overlooked answer: They buy more food at the store. The research firm looked at sales for various packaged-goods categories as gasoline prices rose earlier in the year. When a gallon of gas exceeded $2 in the spring, packaged-goods sales rose 2.5 percent vs. the prior year “after a period of flat sales when prices were below $2 per gallon. This sales boost was a result of consumers’ reduced spending on entertainment and food outside the home, such as quick-service and full-service restaurants.” As intuition might suggest, “convenient meal solutions categories” fared well as people substituted low-effort supermarket foods for no-effort restaurant foods. The report does warn that packaged-goods sales growth could suffer if gas stays above $3 per gallon (which, for now, it hasn’t), “as consumers may be forced to tighten all aspects of their budgets.”