Elevated gas prices hit retail foot traffic: report
The national average for a gallon of regular gasoline is $4.24
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The nation's elevated gas prices – which hit record highs in March – are likely cutting down on retail foot traffic, a new report suggests.
During the week of March 7, retail visits nationwide dropped by 4.3% compared with the same period three years ago, according to data from analytics firm Placer.ai.
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This marked the "most severe" decline in weekly retail foot traffic "that wasn’t directly tied to COVID waves or holiday calendar shifts" over the past year, according to the firm's analysis.
People walk through a shopping area in Manhattan on June 7, 2021 in New York City. (Photo by ANGELA WEISS/AFP via Getty Images / Getty Images)
Even though visits "bounced back somewhat" during the week of March 14, its analysis still shows that "the downward shift remains evident."
"Although consumers had largely shrugged off price inflation over the past several months – perhaps due to mass merchants and larger format grocers’ willingness to keep price increases in check – the spike in gas prices appears to be having a marked impact," according to the report.
Currently, the national average for a gallon of regular gasoline is $4.24, down from the record high of $4.33 earlier this month, according to AAA. However, prices at the pump are still up over 60 cents compared to a month ago and $1.38 more than a year ago.
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An Apple store in Miami, Florida, U.S., on Saturday, Oct. 23, 2021. (Eva Marie Uzcategui/Bloomberg via Getty Images / Getty Images)
In California, the average price is nearing $6 a gallon.
The national average has continued to rise since the beginning of the year due to strained supply and increased demand, according to Edmunds.
But "in the month since Russia’s invasion and the responding cascade of financial sanctions by the U.S. and its allies, the global oil market has responded by spiking upwards," AAA spokesperson Andrew Gross told FOX Business, adding that the oil market responds poorly to volatility.
"It’s an explosive situation that features an oil-producing giant as its main protagonist and a grim reminder that events on the far side of the globe can have a ripple effect on American consumers," he added.
Placer.ai projected that if gas prices continue to increase, it's "likely to continue to weigh on overall retail traffic."
This is particularly true for "retailers that have greater exposure to lower-income consumers where gas makes up a higher percentage of household budgets," according to the analytics firm.