From: Reuters
Published May 21, 2008 07:19 AM

Consumers cut driving but not diets: poll

By Timothy Gardner

NEW YORK (Reuters) - As prices at gasoline pumps and grocery stores rise U.S. consumers say they are driving less but they can't cut down on eating, a new poll found.

Nearly half of respondents to a Reuters/Zogby poll of likely voters in the presidential election later this year said they are driving less to compensate for record U.S. gasoline prices, which hit a record average of $3.80 per gallon on Tuesday according to travel club AAA.

But only about 8 percent of the 1076 respondents in the national poll said they were eating less generally to cope with rising food prices, the poll said.

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"People have more control over gasoline. they are driving less and driving smarter," pollster John Zogby said by telephone.

Private spending data supports the poll's finding on gasoline demand. U.S. drivers pumped nearly 7 percent less gasoline for the week ending May 16 than they did the same week last year, Mastercard Advisors said this week.

Year-to-date, American consumers have bought 1.4 percent less gasoline than they did last year, said Mastercard Advisors, , a unit of MasterCard Inc, that estimates weekly demand based on sales in its payments system.

Zogby said respondents have been sensitive to the $4.00 per gallon gasoline mark in previous polls.

"People have been saying that once prices hit $4.00, they are going to adjust their lifestyles and cutting back driving is one way they are doing it," he said.

To cope with rising food prices, people are changing their habits but still eating about the same amount. Nearly 15 percent of respondents said they are eating less expensive foods. About the same amount said they are using coupons to cut costs.

Nearly 33 percent said they are absorbing higher food costs without any changes to their lives, while only about 18 percent said they are absorbing high fuel costs.

One result of both higher gasoline and food costs may be a rise in the future to more big box retailers like WalMart Stores Inc, which could offer consumers cheaper prices that they would burn less fuel to get to.

"This may be bigger than just pricing, this may be a dramatic change in the way we consume over the longer period," said Zogby.

Still, big retailers face their own troubles with the economy. WalMart gave a tepid outlook for May as the economic situation gets more difficult and consumers try to stretch their dollars by purchasing cheaper meat cuts or trading down to pasta.

One troubling sign of higher prices was that a small segment of consumers are dealing with rising costs by putting down the plastic.

More than 5 percent said they have taken on more personal debt to cope with higher energy costs, while a bit less than 5 percent said they are taking on debt to deal with higher food costs.

"Obviously it is of concern," Zogby said. "Because if that continues it simply means people aren't making enough to keep up."

(Reporting by Timothy Gardner; Editing by David Gregorio)

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