U.S. Consumers Shift Spending as Iran War-Driven Gas Prices Surge

Since the Iran war pushed gasoline to $4 per gallon on March 31, shoppers have altered fueling habits. Costco members now “top up” at warehouse-club pumps more often, while Walmart customers average ten gallons per visit. Traffic has shifted from convenience stations—where pump transactions fell about 10% in March-April—to retailers.

From unfilled gas tanks to fewer frills, retailers see US consumers rethink their spending

Costco CFO Gary Millerchip noted “top-up” behavior, and Walmart CFO John David Rainey called gallons per trip “an indication of stress,” while Jeff Lenard, vice president of National Association of Convenience Stores, warned lost gallons translate into a 10.4% drop in in-store sales. Dollar General CEO Todd Vasos cited $4-per-gallon as prompting cuts, while McDonald’s chairman Chris Kempczinski said gasoline costs will not bring back earners of $45,000.

From unfilled gas tanks to fewer frills, retailers see US consumers rethink their spending

Convenience-store pump transactions fell 10% in March-April, with in-store sales down 10.4%. Retailers sold 6% fewer non-grocery items between April 25 and May 23; housewares, clothing, footwear and sports equipment each slipped 5-7%, while toys and beauty items rose 8%. Placer.ai recorded reduced foot traffic at clothing stores and more grocery and dollar visits. Revenue Management Solutions found restaurant visits decline as gas prices rise, doubling after $4 per gallon.

From unfilled gas tanks to fewer frills, retailers see US consumers rethink their spending

Stew Leonard, president, said shoppers are buying meat in bulk and sticking to lists. Tolsdorf said she is stocking up on fruit, buying less produce, and cutting back on dog treats. Trevor Chapman said he plans fuel stops around Costco and shifts to grocery orders to avoid impulse buys.

Associated Press

Circana retail advisor Marshal Cohen warned that discretionary spending is slowing, highlighting pressure on lower-income households.

From unfilled gas tanks to fewer frills, retailers see US consumers rethink their spending

The National Restaurant Association cited unchanged April restaurant traffic, crediting tax refunds, while Revenue Management Solutions’ analysis shows a gradual decline in restaurant visits as gasoline costs rise, indicating a gap between short-term stability and longer-term pressure.

Associated Press

• “They are visiting store gas stations more frequently to “top up in between what would have normally been a gap between getting the tank to empty because of the concern about what might the gas price be tomorrow,” Chief Financial Officer Gary Millerchip said in late May.” — Gary Millerchip, CFO, Costco

Associated Press

• “When you lose gallons to the big box, you also lose in-store sales,” — Jeff Lenard, Vice President, National Association of Convenience Stores

Associated Press

• “It’s telling me that people are sticking more to their shopping list,” — Stew Leonard, President, Stew Leonard’s

Associated Press

• “Consumers are prioritizing value-oriented retailers like warehouse clubs, superstores, and off-price chains,” — R.J. Hottovy, Head of Analytical Research, Placer.ai

Associated Press

Analysts expect that as tax refunds fade and gasoline stays above $4 per gallon, lower-income households will trim discretionary purchases, pressuring fast-food and retail. Value-oriented discount chains are poised to capture a larger share of shifting market.

From unfilled gas tanks to fewer frills, retailers see US consumers rethink their spending