Gas savings fuel grocery purchases

One of the few bright spots of the sinking economy is plummeting gasoline prices. Since July when gas hit a record $4.06 per gallon average, prices have fallen by around 60 percent, to $1.61 a gallon.

What are consumers doing with all that cash money they’re not pouring into their tanks? According to a new survey by Precima, a retail consulting firm, most Americans are using the windfall to buy groceries.

Of the 3,013 consumers Precima asked to choose from a list of ways they’re spending the money saved on gas, 48 percent cited groceries, 42 percent said holiday gifts, 37 percent said they planned on using the money to pay off their credit card balances, while 10 percent said entertainment.

The gas-to-groceries switch is even higher among certain consumer groups, according to the Precima study. For example, 59 percent of respondents with an income of less than $35,000 and 55 percent of those who said they’ve suffered a direct financial loss during the recession are spending their gas savings on groceries.

“Clearly this is a silver-lining for grocers in the economic dark cloud,” said Brian Ross, general manager of Precima. “With relief at the pump, consumers are returning to some of the aisles they may have foregone in recent months.” Ross said that Precima’s findings provide additional fodder that Americans are dining out less and eating more at home.