NPD Confirms Rising Gasoline Prices Resulted in Lower Gas Consumption

    PORT WASHINGTON, NY--May 10, 2001--With the price of gasoline skyrocketing and predictions that it will rise even more this summer, leading marketing information provider The NPD Group Inc.'s Automotive & Petroleum Group found that Americans' gasoline consumption and buying patterns changed in the first quarter of 2001. NPD's Motor Fuels Index shows that in the first quarter of this year, the average number of gallons purchased monthly was down 7% from first quarter 2000 and 9% from the same period in 1999.
    Although gasoline demand is primarily driven by how many people are driving and how far they travel, it appears that the economy and rising prices are finally making an impact on consumers' wallets and purchasing patterns. According to David Portalatin of NPD's Automotive & Petroleum Group, "The average consumer is purchasing fewer gallons. Although the change in per capita consumption may be caused by such factors as a slowing economy or winter weather, gasoline prices have definitely had an impact."
    Portalatin goes on say that, "Gasoline price volatility has the short-term effect of focusing consumer attention on price, resulting in heightened price shopping and switching to less expensive grades." Although it's too early to predict the effects of high prices and changing economic conditions on long-range gasoline consumption, the strong indicators of shifting consumer purchasing behavior in first quarter of 2001 are:

-	10.6% bought premium grade, down from 15.6% in 1999
-	59.5% say that price was the reason for purchasing the brand they chose most recently, up from 52.1% in 2000

    "While declining premium gas usage and increased price awareness in the purchase decision are established trends, volatile pricing seems to stimulate more of this activity," says Portalatin. "A sustained price increase that reaches record levels may have a more profound impact on modifying driving behavior with consumers taking fewer trips, car pooling, or, ultimately, purchasing more fuel efficient cars,"
    An associated finding from the Motor Fuels Index shows that the percentage of gasoline purchasers who also make a convenience store purchase has dropped more than 2.5 percentage points since second quarter of 1999 to 22.1% in first quarter of this year. This has caused overall convenience store penetration to decline, according to NPD Convenience Store Monitor. In second quarter of 1999, over 68% of Americans were using c-stores at least once in a 30-day period. By the end of first quarter of 2001, that number fell substantially to 60%. This means that after filling their tanks, consumers may have fewer dollars left to purchase other related products and services.