Rising fuel prices are fast becoming the Grinch that stole Christmas.
American consumers are expected to have $46 billion less to spend on discretionary items like holiday presents this year, according to one study. That’s because of sharply rising inflation — a good part of which is tied to a big jump in the cost of gasoline and heating oil.
With more pain at the pump, there’s less money for the fun stuff, according to Customer Growth Partners.
If it weren’t for inflation taking a bite out of household budgets, retail spending would likely continue its torrid pace: It’s risen 14 percent as of September when compared to last year. But because of rising prices, retail spending is expected to rise only 6.7 percent — to $813 million — in November and December, according to CGP.
“That’s a significant deceleration,” Craig Johnson, CGP’s president told The Post. “The slowdown began in late September and we see it continuing through the rest of the year.”
A whopping $35 billion of the $46 billion bite in holiday budgets is attributed to gasoline costs, according to the retail consultancy.
Everyday consumers are also paying more to fill up their cars and heat their homes, Johnson says. For instance, average gasoline prices are up 54 percent across the country — to $3.34 — when compared to last year, according to data crunched by GasBuddy.com. That’s a rise of $1.17 a gallon.
Because of that pain at the pump, “people are not splurging as much as they used to,” Johnson said. According to CGP’s calculations, each dime of increase at the pump takes $1.3 billion a month out of retail spending.
On top of that, there’s less federal aid: No more $600 checks from the government to ease pandemic pain, for instance.
Meanwhile, supply chain challenges will reduce holiday spending by at least $10 billion as consumers may not find what they are looking for before the holidays and may purchase it in January instead — or not at all.
What they are purchasing is also changing: Shoppers are on track to to load up on clothing and accessories, sales of which are expected to increase by 18 percent from a year ago — when all consumers wanted was sweatpants and stay-at-home clothing.
Spending on consumer electronics and appliances — usually the top-selling items — is expected to increase by 10 percent fueled by Apple’s new iPhone 13 model, updated iPad models and new laptop computers.
Spending on sporting goods and toys is on pace to increase by 9 percent, according to CGP.
But all bets are off if there’s a COVID-19 “rebound,” Johnson said — or if energy prices continue to spike. In that case, sales forecasts could be way off as people retrench spending even further.