HOW CONSUMERS BEHAVE AT THE PUMP
Nearly 40 million Americans fill up their vehicles every day. How they drive, consider gas prices and determine whether they go inside the store has a profound impact on convenience stores.
ByPublished: 3/1/2017 1
Nearly 40 million Americans fill up their vehicles every day. How they drive, consider gas prices and determine whether to shop inside a convenience store for food, snacks and beverages has a profound impact on the retail channel that sells 80% of the fuel purchased in the United States. Let’s look at some of the broad characteristics of how consumers buy gas and examine how convenience retailers can keep them coming back.
In particular, we examine:
- Consumer behavior at the pump
- What retailers can do to change consumer behavior
- Overall driving habits
NACS has surveyed consumers about their perceptions related to gas prices since 2007 and has conducted monthly consumer sentiment surveys since 2013. NACS commissioned Penn, Schoen and Berland Associates LLC to conduct 1,114 online interviews with adult Americans on January 3-6, 2017. The margin of error for the entire sample is +/- 2.95% at the 95% confidence interval and higher for subgroups. Below are the questions and overall responses.
Consumer Behavior at the Pump
Understanding how consumers feel about gasoline prices can help convenience retailers execute their marketing strategies. It’s also important to determine how consumers buy gas, which reveals some interesting variations.
Understanding how consumers feel about gasoline prices can help convenience retailers execute their marketing strategies. It’s also important to determine how consumers buy gas, which reveals some interesting variations.
Filling Up the Tank
Consumers are more likely to buy gas during the evening rush than the morning daypart (36% vs. 22%), likely because of morning time pressures. But these time pressures vary by demographic. Those most likely to purchase fuel in the morning are consumers age 34-49 who generally face time pressures related to organizing family activities, etc. There may be an opportunity to focus marketing on this segment to encourage more breakfast items. Meanwhile, those age 50 and older are most likely to purchase gas mid-day, outside of rush hours. A promotional campaign around slowing down and enjoying a snack or meal inside the store might appeal to this demographic.
Consumers are more likely to buy gas during the evening rush than the morning daypart (36% vs. 22%), likely because of morning time pressures. But these time pressures vary by demographic. Those most likely to purchase fuel in the morning are consumers age 34-49 who generally face time pressures related to organizing family activities, etc. There may be an opportunity to focus marketing on this segment to encourage more breakfast items. Meanwhile, those age 50 and older are most likely to purchase gas mid-day, outside of rush hours. A promotional campaign around slowing down and enjoying a snack or meal inside the store might appeal to this demographic.
Q: What time of the day do you often purchase gas?
| (%) Gas Consumers 2017 | Age | |||
|---|---|---|---|---|
| 18-34 | 35-49 | 50+ | ||
| Morning, or roughly 6 am to 10 am | 22 | 19 | 28 | 21 |
| Mid-day, or roughly 10 am to 3 pm | 32 | 27 | 25 | 41 |
| Afternoon, or roughly 3 pm to 7 pm | 36 | 41 | 37 | 32 |
| Night, or roughly 7 pm to midnight | 9 | 13 | 10 | 6 |
| Overnight, or roughly midnight to 6 am | 1 | 0 | 1 | 0 |
Most fueling sites offer three octane grades: regular (usually 87 octane), mid-grade (usually 89 octane), and premium (usually 92 or 93 octane). Regular octane is the dominant fuel, while those who buy higher-octane fuels are likely doing so because their vehicle requires it. There are some variations by age; younger consumers are the least interested in mid-grade as a fueling option.
Q: What octane grade do you typically purchase for the vehicle you most commonly drive?
| (%) Gas Consumers 2017 | Gender | Age | ||||
|---|---|---|---|---|---|---|
| M | F | 18-34 | 35-49 | 50+ | ||
| Regular | 82 | 80 | 84 | 82 | 78 | 86 |
| Mid-grade | 8 | 10 | 7 | 5 | 11 | 5 |
| Premium | 8 | 10 | 7 | 11 | 10 | 5 |
| Other | 1 | 0 | 1 | 0 | 1 | 1 |
| Don't know | 0 | 0 | 1 | 1 | 0 | 0 |
Fully three quarters of consumers pay by plastic (73%). The percentage of consumers who pay by plastic has increased by 9 percentage points between 2009 and 2017. In reviewing subcategories, debit cards are most used by females (41%) and those age 18–34 (45%). Credit cards are most popular with those age 50 and older (47%).
Q: Which payment method do you typically use to purchase gas?
| (%) Gas Consumers 2017 | Track | ||||||
|---|---|---|---|---|---|---|---|
| 2016 | 2015 | 2014 | 2013 | 2012 | 2009 | ||
| Cash | 26 | 28 | 23 | 27 | 27 | 33 | 35 |
| Credit | 36 | 34 | 40 | 37 | 35 | 41 | 37 |
| Debit | 37 | 38 | 38 | 36 | 37 | 24 | 27 |
| Total debit and credit | 73 | 72 | 78 | 73 | 72 | 65 | 64 |
Shopping on Price
The rise of mobile commerce, apps and price-checking websites make it easier for consumers to shop for deals and “steals” on everything from appliances to new shoes, a mentality that also carries over to gasoline. Simply put, no matter what the price per gallon is, consumers want to find the best price they can. Approximately two in three consumers have consistently shopped on price, whether gas was as low as $1.62 per gallon at the start of 2009, or as high as $3.28 per gallon at the start of 2013. However, a focus on price is diminishing and has fallen 10 percentage points in just two years. Location has grown more important to consumers, as well as the in-store food offer. The price per gallon is least important to those who over the past 30 days who bought a sandwich at a place where they also purchased gas (56%).
The rise of mobile commerce, apps and price-checking websites make it easier for consumers to shop for deals and “steals” on everything from appliances to new shoes, a mentality that also carries over to gasoline. Simply put, no matter what the price per gallon is, consumers want to find the best price they can. Approximately two in three consumers have consistently shopped on price, whether gas was as low as $1.62 per gallon at the start of 2009, or as high as $3.28 per gallon at the start of 2013. However, a focus on price is diminishing and has fallen 10 percentage points in just two years. Location has grown more important to consumers, as well as the in-store food offer. The price per gallon is least important to those who over the past 30 days who bought a sandwich at a place where they also purchased gas (56%).
Q: When buying gas, which of the following factors is important to you?
| (%) Gas Consumers 2017 | Track | ||||||
|---|---|---|---|---|---|---|---|
| 2016 | 2015 | 2014 | 2013 | 2012 | 2009 | ||
| Price | 61 | 64 | 71 | 66 | 71 | 63 | 70 |
| Location of store/station | 25 | 20 | 18 | 20 | 18 | 20 | 19 |
| Brand | 8 | 9 | 8 | 8 | 8 | 8 | 9 |
| Ease of entrance or exit | 4 | 6 | 3 | 4 | 2 | 6 | - |
| Other | 1 | 1 | 1 | 1 | 1 | 2 | 1 |
So how do price-sensitive consumers shop by price? The traditional gas price sign remains the most common method, particularly among drivers during the morning rush (65%). Loyalty cards are a second choice and are used by one in seven (16%) price-sensitive consumers.
Interestingly, loyalty cards are not popular with tech-savvy younger consumers, who are instead much more likely to look at the price sign.
| (%) Gas Consumers 2017 | Track | Age | |||||||
|---|---|---|---|---|---|---|---|---|---|
| '16 | '15 | '14 | '13 | '12 | 18-34 | 35-49 | 50+ | ||
| Price sign at store | 59 | 63 | 63 | 57 | 65 | 65* | 67 | 54 | 56 |
| Store tied to a loyalty card or other gas discount | 16 | 16 | 18 | 18 | 16 | 5* | 9 | 20 | 19 |
| Store has reputation for low prices | 12 | 11 | 9 | 10 | 7 | 5* | 14 | 12 | 11 |
| Online gas price aggregator/website | 11 | 10 | 9 | 14 | 10 | 3* | 11 | 13 | 11 |
| Other | 1 | 1 | 1 | 1 | 1 | 21* | 0 | 1 | 2 |
While 16% of price-sensitive consumers say they regularly use loyalty cards to price shop, a much higher percentage of consumers say they have at least tried using a loyalty card, changing their payment method or by earning discounts for buying additional items to reduce the price per gallon.
Q: Have you taken advantage of these discounts? (multiple responses permitted)
| (%) Gas Consumers 2017 | Track | Gender | |||
|---|---|---|---|---|---|
| '16 | '15 | M | F | ||
| Discount for using a loyalty card or app | 46 | 41 | 43 | 44 | 49 |
| Discount for paying with cash instead of debit/credit card | 23 | 22 | 22 | 26 | 20 |
| Discount for using a specific credit card to buy gas | 16 | 15 | 16 | 18 | 14 |
| Discount for buying something else at the gas station (car wash, something in the store) | 14 | 12 | 14 | 16 | 12 |
| None of the above | 32 | 37 | 35 | 31 | 33 |
Have of all consumers (49%) say they prefer a specific store or chain. Price is the top reason for this preference, but reputation also plays a strong role, whether for quality of fuel (41%) or quality of in-store items (16%). A strong 36% of consumers who say they bought a sandwich at a convenience store over the past 30 days say the in-store offer is important.
Q: Why do you prefer a particular convenience store? (Asked of the 49% with a preference, multiple responses permitted.)
| (%) Gas Consumers 2017 | Track | Age | |||||
|---|---|---|---|---|---|---|---|
| '16 | '15 | '12 | 18-34 | 35-49 | 50+ | ||
| It usually has lower prices | 51 | 47 | 57 | * | 57 | 49 | 49 |
| Quality of fuel | 41 | 39 | 46 | 38 | 39 | 45 | 41 |
| Loyalty program with chain | 30 | 33 | 37 | 5 | 33 | 34 | 25 |
| Loyalty program with individual store | 17 | 17 | 14 | * | 21 | 15 | 15 |
| Quality of items inside the store | 16 | 12 | 11 | 1 | 27 | 18 | 7 |
| Other | 9 | 8 | 5 | 36 | 9 | 7 | 10 |
| Don’t know | 1 | 1 | 0 | 1 | 1 | 1 | 1 |
* This response was not included in 2012 study
What Retailers Can Do to Change Consumer Behavior
How might consumers adjust their behavior to save money on gas, beyond selecting the best price they see in their neighborhood or on a trip? Good news for convenience retailers: Consumers especially would consider an alternative payment method to save money at the pump.
How might consumers adjust their behavior to save money on gas, beyond selecting the best price they see in their neighborhood or on a trip? Good news for convenience retailers: Consumers especially would consider an alternative payment method to save money at the pump.
Q: Do you agree with the following statement?
| (%) Gas consumers | Total agree 2017 | Total agree 2016 | Total agree 2015 | Total agree 2014 |
|---|---|---|---|---|
| I would pay with a debit card instead of a credit card to save 5 cents per gallon on gas | 74 | 73 | 69 | 78 |
| I would pay with cash instead of a debit or credit card to save 5 cents per gallon on gas | 74 | 72 | 72 | 76 |
| I would take a left-hand turn across a busy street to save 5 cents per gallon on gas | 64 | 64 | 64 | 67 |
| I would drive 5 minutes out of my way to save 5 cents per gallon on gas | 67 | 60 | 63 | 66 |
| I would drive 10 minutes out of my way to save 5 cents per gallon on gas | 38 | 39 | 36 | 39 |
| Price at time of survey ($) | 2.30 | 1.98 | 2.20 | 3.35 |
Younger consumers (ages 18–34) are most likely to consider discounts for gas purchases with a debit card (85%) or by cash (80%).
Consumers also would go out of their way to save money on their gas purchases. Approximately two in three say that they would take a left-hand turn across a busy street (64%) or drive 5 minutes out of their way (67%) to save 5 cents per gallon. Remarkably, these percentages are very similar to 2014 when gas prices were higher.
Furthermore, 38% say they would drive 10 minutes out of their way to save 5 cents per gallon. While it might feel good to find a “deal” on gas prices, the action is a money-losing proposition, even with gas prices at $2.30 per gallon.
Driving 10 minutes out of the way to save 5 cents per gallon means a 20-minute roundtrip. Assuming the car travels 45 mph and gets 30 miles per gallon, the trip would burn 0.5 gallons of gas—or roughly $1.15 at January 2016 prices. To make it financially worthwhile to save 5 cents per gallon, one would have to buy 23 gallons of gas at $2.30 per gallon simply to break even.
More than anything else, this exemplifies consumer price sensitivity relating to gas prices. Whether they actually save money, consumers want to feel like they found a “deal” or “did something” about the price they paid.
Getting Them Inside the Store
Retailers know that if they can get a customer to fill-up at their store, they have a good chance to get them inside the store to buy other items. And because in-store sales make up around two-thirds of a store’s overall profits, it’s vital to get customers to buy something besides low-margin fuels. And nearly half of all gas customers do go inside the store.
Retailers know that if they can get a customer to fill-up at their store, they have a good chance to get them inside the store to buy other items. And because in-store sales make up around two-thirds of a store’s overall profits, it’s vital to get customers to buy something besides low-margin fuels. And nearly half of all gas customers do go inside the store.
Q: Thinking just about the last time you purchased gas, did you also go inside the store?
| (%) Gas Consumers 2017 | Age | |||
|---|---|---|---|---|
| 18-34 | 35-49 | 50+ | ||
| Yes | 42 | 51 | 47 | 33 |
| No | 52 | 45 | 50 | 60 |
| There was no c-store associated with that location | 5 | 5 | 4 | 7 |
Most younger consumers age 18–34 (51%) go inside the store. And a strong 48% of those who buy gas in the morning go inside the store, setting up a great opportunity for convenience stores to communicate their breakfast and coffee program.
Among those who went inside the store, drinks were the most popular items purchased, especially among those ages 35–49 (55%). Meanwhile, meals were most popular with younger consumers age 18–34 (13%).
Q: Which of the following did you do while you were inside the store? (multiple responses permitted)
| (%) Gas Consumers 2017 | Age | |||
|---|---|---|---|---|
| 18-34 | 35-49 | 50+ | ||
| Paid for gas at the register | 50 | 47 | 52 | 52 |
| Bought a beverage | 45 | 47 | 55 | 32 |
| Bought a snack | 36 | 47 | 39 | 22 |
| Bought lottery tickets | 25 | 23 | 24 | 28 |
| Bought cigarettes | 24 | 26 | 28 | 17 |
| Used the bathroom | 22 | 23 | 27 | 18 |
| Used the ATM | 11 | 18 | 10 | 7 |
| Bought a sandwich or other meal | 8 | 13 | 6 | 5 |
| Bought beer/wine | 8 | 10 | 10 | 6 |
| Bought grocery items like bread or milk | 6 | 3 | 9 | 6 |
| Went in to look but did not buy anything | 4 | 6 | 3 | 2 |
| Other | 3 | 1 | 2 | 6 |
| None of the above | 3 | 2 | 3 | 4 |
Overall Driving Habits
In 2016, fuel demand in the United States increased 1.1% to 9.32 million barrels per day, and the U.S. Department of Energy expects consumption to increase to record levels in each of the next two years. Demand was clearly up, but only about one in eight (12%) people drove greater distances in 2016. Thirty-three percent of all consumers said that their driving increased and only 38% of that group said they drove more than in 2015.
In 2016, fuel demand in the United States increased 1.1% to 9.32 million barrels per day, and the U.S. Department of Energy expects consumption to increase to record levels in each of the next two years. Demand was clearly up, but only about one in eight (12%) people drove greater distances in 2016. Thirty-three percent of all consumers said that their driving increased and only 38% of that group said they drove more than in 2015.
Q: Compared to a year ago, has the amount you drive changed?
| (%) Gas Consumers | |
|---|---|
| Yes | 33 |
| No | 64 |
| Don't know | 3 |
Q: Compared to a year ago, are driving…? (asked among the 33% who said the amount they drive has changed)
| (%) Gas Consumers | Track | Age | |||
|---|---|---|---|---|---|
| 2016 | 18-34 | 35-49 | 50+ | ||
| Much more | 11 | 14 | 16 | 11 | 3 |
| Somewhat more | 27 | 45 | 29 | 34 | 17 |
| Somewhat less | 43 | 28 | 43 | 35 | 53 |
| Much less | 19 | 14 | 12 | 20 | 27 |
Younger consumers age 18–34 are most likely to drive more (45%), while those age 50 or older are least likely (20%).
Finally, it’s important to understand why people are driving more. More than 40% of all Americans (41%) who said they are driving more said it was because of their job, whether it was a new job, a second job or a longer commute. Only 8% said that they drove more because gas prices were low.
Q: Why are you driving more than you were a year ago?
| (%) Gas Consumers | Gender | Age | ||||
|---|---|---|---|---|---|---|
| M | F | 18-34 | 35-49 | 50+ | ||
| My job/longer commute to work/I got a new or second job | 41 | 39 | 42 | 49 | 32 | 36 |
| Lower gas prices | 8 | 8 | 8 | 11 | 6 | 3 |
| School/I commute to my/my child’s school | 8 | 2 | 12 | 7 | 11 | 4 |
| I visit family/friends more now | 7 | 5 | 8 | 5 | 6 | 16 |
| My children/taking my children to more places/activities | 6 | 5 | 7 | 3 | 9 | 7 |
| More appointments/a family member has more appointments | 4 | 6 | 3 | 6 | 2 | 5 |
| Shopping more/going to the mall more/stores are further away now | 3 | 2 | 3 | 0 | 3 | 8 |
| I have to travel further now/I live in a place where things are further away now | 3 | 4 | 2 | 5 | 0 | 4 |
| I am going more places | 2 | 4 | 1 | 2 | 4 | 0 |
| I have a better car now | 2 | 4 | 1 | 2 | 0 | 8 |
| I have a license now | 2 | 0 | 3 | 4 | 0 | 0 |
| General negative | 2 | 2 | 2 | 2 | 3 | 0 |
| Other | 10 | 14 | 6 | 3 | 19 | 9 |
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