NEW YORK (AP) — American consumers haven’t stopped spending since the war in Iran drove up fuel prices, but many shoppers are reevaluating what they buy and where, according to company executives and retail analysts.
The behavioral changes observed so far are subtle, such as altered routines for buying gasoline and fewer visits to clothing and furniture stores. They are also uneven across the population. During recent earnings calls with analysts, executives from major U.S. companies such as Walmart, McDonald’s and Dollar General cited overall shopper resilience, as well as apparent cuts from lower-income customers.
But new signs of strain cited by major retailers as generous income tax refunds helped boost their sales have some economists and analysts thinking they will see a wider cutback when the refunds run out and consumers face the cumulative impact of more expensive gas and higher prices for food, clothing, insurance and other goods and services.
Trevor Chapman, a communications executive in West Hills, Calif., said that instead of going to a local independent gas station, he and his wife now plan their gas stops around Costco stores with gas stations. The couple is also doing more online grocery shopping to avoid impulse buys, he said.
“Gas is kind of a catalyst,” Chapman said. “It flows throughout the budget. We’re trying to keep everything as normal as possible. But it’s starting to feel like it’s adding up more and more.”
Long before the US and Israel went to war, many consumers were already becoming more selective with their discretionary purchases, weary of several years of stubborn inflation and tariffs on imported goods imposed last year.
The U.S. Commerce Department reported last week that higher prices, not more purchases, accounted for most of the increase in Americans’ spending in April, when a key gauge of inflation hit the highest level since October 2023.
Filling instead of filling
Members-only warehouse stores like Costco, Walmart’s Sam’s Club and BJ’s Wholesale Club have seen more traffic at their gas pumps since the fight began in late February, according to the companies. Fuel is usually cheaper at wholesale clubs.
But many drivers aren’t filling their tanks, Walmart Chief Financial Officer John David Rainey told analysts late last month.
For the first time since 2022, Walmart customers and Sam’s Club members are buying an average of less than 10 gallons per trip, he said.
“That’s an indicator of stress,” Rainey said.
Costco members are also making changes. They are visiting convenience store gas stations more often to “fill in between what would normally have been a gap between emptying the tank because of the worry of what the price of gas might be tomorrow,” Chief Financial Officer Gary Millerchip said in late May.
Meanwhile, rising gas prices have hurt convenience stores, where 80% of all fuel is sold in the US, according to Jeff Lenard, a vice president at the National Convenience Store Association.
An analysis of sales by the trade group found that the number of transactions at the pumps at the properties of 130 convenience store companies fell by almost 10% during the months of March and April compared with the same two months last year. According to the analysis, the number of sales within company stores fell by 10.4%.
“When you lose liters in the big box, you lose in-store sales,” Lenard said.
Changing eating habits
Higher gas prices didn’t stop many Americans from eating out in the first two months of the war with Iran. Tax refunds helped, the National Restaurant Association said. Customer traffic at US restaurants in April was unchanged from the same month last year, although a 2.6% increase in restaurant spending resulted mainly from higher menu prices, according to market research firm Circana.
But cracks are beginning to form as budget-conscious Americans grapple with the combined weight of paying more for gas and other consumer goods, along with rising costs in other areas from past and current inflation.
The price of gas won’t help keep customers with household incomes of $45,000 or less coming back to fast-food restaurants in the U.S., McDonald’s Chairman and CEO Chris Kempczinski said last month. People in that income bracket began cutting back on their fast food purchases after the period of inflation that accompanied the end of the COVID-19 pandemic, and the trend picked up last year.
US-based restaurant consulting firm Revenue Management Solutions analyzed 14.6 billion restaurant transactions from the past four years and found that as gasoline becomes more expensive, restaurant visits gradually decline, according to Head of Research Sebastián Fernandez. The analysis showed that the impact doubles when gas hits $4, which it did as a nationwide average on March 31.
Consumers are also making concessions when buying groceries, according to Stew Leonard, president of an eight-store supermarket chain that his father founded, Stew Leonard’s. He has noticed customers who buy meat in bulk to freeze are less tempted to buy products on display during live food demonstrations or offered for sampling.
“It’s telling me that people are sticking more to their shopping list,” Leonard said.
Dollar General CEO Todd Vasos also cited $4 per gallon gas as a tipping point that had more consumers with household incomes above $100,000 frequenting the discount chain. Vasos told analysts Tuesday that many of Dollar General’s core shoppers, who are middle- and low-income and live in rural areas, were cutting back on their grocery spending.
Sophie Tolsdorf, 29, of La Grange, Kentucky, said she is one of those consumers who stocks up on meat when the price is reasonable. She also switched to buying whole fruit instead of pre-cut fruit in containers and cut rawhide bones for her dog that cost $40 a pack.
“He might have noticed,” Tolsdorf said. “He’s definitely a little bored during the workday right now.”
Needs versus wants
Before the war, retailers had spent multiple earnings seasons emphasizing consumer caution and selectivity as factors that could weigh on sales of nonessential products. Shoppers appear to have curbed their discretionary spending even more as the cost of buying gas rose, said Marshal Cohen, chief retail adviser at Circana.
Between April 25 and May 23, US retailers sold 6% fewer non-food items than they did during the comparable four-week period in 2025, Cohen said. Home appliances, clothing, footwear and sporting goods saw the largest declines, ranging from 5% to 7%. Circana reported that toys and beauty items remained bright spots, registering at least an 8% increase in the number of units sold.
Location intelligence company Placer.ai, which tracks people’s movements based on cellphone usage, saw visits to BJ’s, Costco and Sam’s Club gas stations begin to accelerate in early March, matching a sharp increase in gas prices, according to RJ Hottovy, the company’s head of analytics research.
From early May, Placer.ai data showed four consecutive weeks of decreased foot traffic to clothing, electronics and home furnishings stores and more trips to grocery stores and dollar stores.
“Consumers are prioritizing value-oriented retailers like warehouse clubs, superstores and off-price chains,” Hottovy said.AP Food Writer Dee-Ann Durbin in Detroit contributed to the report.
By ANNE D’INNOCENZIO AP Retail Writer
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