0528gasaudHear Danny Bellenger, Georgia State University professor of marketing, describe how gas prices are changing consumer behavior.
How quickly things change. In some parts of North Georgia, gas is already exceeding the $4 mark. Now, people are discussing something previously unimaginable: How soon will gas hit $5?
And yet, $4 gasoline doesn’t seem to have brought about the major change in consumer behavior that economists had predicted.
"Our (sales) volume is not down," said Mike Thornbrugh, spokesman for QuikTrip, which has gas stations in Gainesville and Oakwood. "But people may be coming in more often, spending $35 twice a week instead of $70 all at once (to fill their gas tank)."
And though some gas stations have reported a slump in convenience store sales, QuikTrip customers still seem to be willing to spend extra for a mocha latte or a Snickers bar.
"Our inside sales, believe it or not, are still very strong," Thornbrugh said.
In fact, the chain is betting that people will continue to buy food and beverages, no matter how expensive gas becomes. Thornbrugh said QuikTrip soon will be opening "QT Kitchens" in its stores, featuring upscale sandwiches and pastries.
"People are still going to need gas. They’re still going to get hungry and thirsty," he said.
But Danny Bellenger, a professor of marketing at Georgia State University, said people are becoming more conscious of how they spend their money.
"Basically what’s happened is that consumer confidence is at almost a 30-year low," he said. "The very affluent, it’s not going to affect their behavior at all. But those with more moderate incomes are having to buy the gas because they have to work, take the kids to school, do their shopping. So they’re having to find other things they can cut."
Bellenger said people already are postponing certain purchases, such as jewelry, major vacations and anything that’s optional.
But what happens when people have eliminated optional purchases and they can’t buy basic necessities? What happens if the price of gas reaches $5 or more, and minimum-wage workers are earning barely $8 an hour?
"You may get to a point where people say, ‘I can’t afford to work,’" Bellenger said.
As gasoline becomes a precious commodity, could its scarcity lead to criminal behavior? When gas prices first spiked a few years ago, many local stations reported customers who filled their tank and then drove off without paying.
That rarely happens anymore, because most stations have switched to a system where customers must pay for gas in advance. But the latest gas-related crime may be siphoning — using a hose to steal fuel out of someone else’s vehicle.
There have been scattered reports of such incidents elsewhere, though Sgt. Kiley Sargent, spokesman for the Hall County Sheriff’s Office, said he hasn’t seen it here yet.
What’s clear is that many drivers are looking at transportation alternatives. Janice Crow, general manager of Hall Area Transit, said she’s getting more calls from people wanting to know about the "Red Rabbit" bus system.
"Ridership went way up after the last big spike in gas prices," she said.
In March 2008, the number of Red Rabbit users was up 29.8 percent from March 2007. And in April, Crow said, it was up 32.6 percent from the same month a year earlier.
Suzy Bowen, spokeswoman for Atlanta’s Clean Air Campaign, which includes Hall County, said interest in the Cash for Commuters program has increased dramatically. Participants can earn up to $3 a day for three months if they car pool, take public transit, walk, bike or telework.
Enrollment in the program from January through April was up 86 percent compared to the same period in 2007, Bowen said. And for May 1 through 27 this year, enrollment shot up 138 percent more than the previous May.
Those who still want the convenience of driving their own cars are looking for cheaper ways to do it.
"The average customer that comes in here now is not even looking at a big SUV or full-size truck," said Jason Swoszowski, sales manager at Milton Martin Toyota in Gainesville. "That’s the type of vehicle they want to trade out of. But the market is being flooded with SUVs. You’re being put in a situation where you can’t trade (because you owe more than the vehicle is worth)."
Swoszowski said he can’t keep up with requests for the Toyota Prius, the most fuel-efficient hybrid car currently sold in the U.S.
"Demand is far exceeding what it was a year ago," he said. "But we still only get two or three a month (from the manufacturer). We’re putting people on a waiting list, and the typical wait is 90 to 120 days."
Though all smaller cars are selling well, Swoszowski said some customers have their heart set on a Prius and don’t want a car with a regular but fuel-efficient engine.
"The average price (of a Prius) will run you $27,000," he said. "I tell people they could get a Corolla for only $17,000, and that extra $10,000 will buy a lot of gas. Some are still hung up on the fact that a hybrid is the way to go. They’re worried about what gas prices are going to do in the future, when gas is $5, $6, $7."
And just as the price of gas goes up when it becomes scarce and desirable, the same has happened with the Prius.
"Because of the demand for hybrids, some dealers are selling them above market value, just because they can," said Swoszowski. "That’s unfortunate."
Bellenger said as the price of gas goes up, the break-even point for hybrids is coming down. That means it doesn’t take as long for the amount of money saved on fuel to cancel out the higher purchase price of a hybrid.
What has definitely changed, he said, is that for the first time in decades, consumers are making fuel economy a high priority when they buy a car. And that’s one positive note in an otherwise bleak situation.
"There’s no easy, short-term solution (to the fuel crisis)," Bellenger said. "In the long term, more people buying fuel-efficient cars will drive down the demand for gas."