By  on August 8, 2006

WASHINGTON — The bad news about spiraling gasoline prices just keeps coming, and it sent the shares of several major retailers downward on Monday.

Heightening fears that consumers will cut back their spending over the next few weeks during the key back-to-school and fall seasons, BP announced that it would suspend production of 400,000 barrels of oil a day in Alaska. The suspension helped drive down shares of Wal-Mart Stores Inc., Target Corp., Federated Department Stores, Sears Holdings and Nordstrom Inc. on the New York Stock Exchange.

Wal-Mart's share price dropped 5 cents to close at $44.82; Target fell 48 cents to $46.74; Federated dropped 20 cents to $34.88; Sears Holdings was down $2.17 to $140.57, and Nordstrom fell 42 cents to $34.46.

Bucking the trend were Kohl's Corp., up 27 cents to close at $59.06 a share, and J.C. Penney Co., up 65 cents to $64.72.

High gas prices have already put a squeeze on consumers, but BP's emergency shutdown and the potential for a broader conflict in the oil-rich Middle East could portend a longer-term impact.

In addition to cutting into tight budgets, gasoline prices, which are tied to oil prices, have great psychological importance for consumers constantly deciding how much they can spend on apparel, a largely discretionary purchase.

American consumers have been resilient as gas pump prices rose, but they are now beginning to switch to a more long-term stance, tweaking the way they live and how they spend their leisure time to adjust to the new reality, said experts.

That reality is starkly different from even the recent past; a gallon of regular gasoline sold for $3.04 on Monday, an increase of 30.2 percent from a year earlier, according to the American Automobile Association.

The rise has hit the consumer with household earnings of $30,000 to $80,000 particularly hard, said Allen Questrom, retail veteran and former J.C. Penney chairman and chief executive officer. The drain of higher gas prices is compounded for people who bought homes with variable-rate mortgages and have seen their payments go up.

"You take the lower-income people, they have been much more affected because their percent of income devoted to interest payments and energy is a much bigger piece of their total disposable [income]," said Questrom.

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