High Fuel Prices Affecting Shopping Habits

The average UK motorist now pays 23 percent more for fuel than just one year ago. Combine this with a 30 percent increase in auto insurance premiums and driving costs now total more than £3,000 annually. High prices at the fuel pump are affecting more than just car finance. Some British retailers are reporting uncharacteristic declines in sales.

John Lewis recently revealed that first-quarter sales fell nine percent at its Bluewater outlet in Kent and 11 percent at its Bristol Cribbs Causeway store. UK shopping centers located out of town experienced a 12 percent decline in sales during March, according to the retail research firm Synovate. Several analysts are blaming skyrocketing fuel prices.

With these costs expected to remain high, they expect a structural shift in shopping practices to occur. Tim Denison, retail intelligence director for Synovate Retail Performance, predicted that drivers will make less-frequent visits to centers out of town and spend more time shopping during each trip. Retail research group CACI discovered that it costs approximately £12 more to drive to centers on the outskirts of large towns than to shop in town.

Sainsbury’s Finance research indicates that nearly 1.3 million UK residents have given up driving within the past year. Of those who are still on the road, 45 percent report using their car less frequently. Despite this, major shopping centers may be more attractive than town shops because people can get all shopping done in one trip.

Increasing fuel prices may lead to in-town shops becoming more attractive. It is much cheaper to walk to a local grocer than drive 20 or 30 miles to a large supermarket. Car loans will not soon become history, as not all Brits are likely to give up their private cars. However, more car finance agreements may be for vehicles that are smaller and more fuel-efficient.