Will Gas Prices Affect Retail Spending?

This article, "Will gas prices hit retail stocks?", talks about the threat that rising gas prices will have a negative impact on shareholders of retail stock. Some believe that current gas prices are enough to impact spending on retail purchases, but others believe gas prices will have to rise even more to make people change their spending habits. So far there have not been any significant changes in retail spending. In fact, gas consumption has actually INCREASED over the last month, despite the rise in price. Analysts think that companies that cater to the wealthy, such as Tiffany and Prada, will not be affected much, but they are not sure about companies who are supported mostly by lower-income consumers. Michael Cox, a senior retail analyst at Piper Jaffray, believes that consumers will start to change their spending habits when gas prices reach about $2.50 a gallon. A recent survey taken found that twenty-one percent of people said they would spend less on clothes, twenty-eight percent said they would spend less on travel, and thirty-five percent said they would start looking for a more fuel-efficient car. Another economist, Rich Hastings, believes that as gas prices continue to rise, companies like Wal-Mart will flourish because of their low prices.