A car is pumping gas at a Costco gas station. The conflict between Ukraine and Russia resulted in increased gas prices in the United States in the past two weeks.
Michael Ho Wai | Lightrocket | Getty Images
Along with fried chicken, biscuits and iced tea, family meals at Southern fast-food chain Bojangles now include a free $10 gas card.
At select Krispy Kreme shops, the price of a dozen glazed doughnuts has dropped temporarily on Wednesdays to cut drivers a break as they pay more for gallons of gas.
Companies are dangling gas-related perks as Americans feel pain in the pump and some start to make choices about where to trim back the budget. Warehouse clubs, including Walmart-owned Sam’s Club and BJ’s Wholesale, have rolled out special promotions to emphasize cheaper gas as a key membership benefit. Grocers, including Kroger and Giant Eagle, are touting fuel programs that turn customers’ grocery spending into a lower price per gallon.
“We are an automobile economy,” said Jackie Woodward, Bojangles’ chief brand and marketing officer. “It is something that really hits at the heart of how people go about their lives, and I think that’s why its resonating with our customers.”
Bojangles began handing out $1 million in gas gift cards last week at company-owned restaurants and franchises, many of which are in states in the South especially hard hit by inflation.
Woodward said the Charlotte-based company’s customer is typically a blue-collar worker who “cares about the food they feed their families and how to stretch their dollar.” She said the fast-food chain seized the opportunity to show it is tuned in to customers’ concerns. So far, she said, customers have responded with surprise and gratitude as they get more for their money.
Gas prices are just one of the everyday costs that have jumped as inflation hovers at an approximately 40-year high. The national average for a gallon hit $4.331 on March 11, the highest price on record, according to AAA. It has dropped off to an average of $4.098 as of Tuesday, but that’s still a significant increase from the $2.863 average a year ago. In some Northeast and West Coast states, gas prices are even higher. In California, for example, an average gallon of gas rang in at $5.748 as of Tuesday, according to AAA.
The prices, posted on big signs across the country, drive just a fraction of household expenses but can have an outsize impact on consumer confidence, said U.S. Bank Chief Economist Tendayi Kapfidze.
“The mindset effect is probably bigger than the wallet effect,” he said.
Retail sales impact
Consumers spend about 4% to 6% of their monthly expenses on gas, Kapfidze said. It is more of a burden in low-income households, where the percentage can rise to as much as 20%.
Retailers will get fresh clues about how consumers are responding to those prices Thursday morning, when the Commerce Department reports retail sales from March. Retail sales in February fell shy of expectations, signaling that consumers’ pace of spending…