U.S. drivers are filling up less of their tanks during more frequent gas station visits, just one of the ways retailers and market data suggest consumers are adjusting to sharply higher gas prices in the wake of the war in Iran.

Less Gas, More Deals—Here’s How High Gas Prices Are Changing the Way Americans Spend

Key Takeaways

U.S. drivers are filling up their tanks a bit less and making more frequent gas station visits, just some of the ways retailers and market data suggest consumers are adjusting to sharply higher gas prices in the wake of the war in Iran.
According to retail data provider Placer.ai, visits to discretionary retailers declined in April, and even non-discretionary stores have seen visits decline year-over-year in recent weeks.

Don’t call it demand destruction. Instead, let’s say it’s demand moderation.

Americans facing the highest fuel prices in years are putting less gas in their tanks and making more frequent visits to the pump, according to retailers, mirroring the way Americans have adjusted their food shopping habits to contend with inflation. Drivers feeling the pinch are increasingly seeking out value at wholesale clubs like Costco (COST), Walmart’s (WMT) Sam’s Club, and BJ’s, all of which offer members discounted gas. According to location intelligence firm Placer.ai, visits to BJ’s Gas, Costco Gas, and Sam’s Club Fuel surged in early March as prices began to rise. At all three chains, the share of customers making multiple visits a month rose year-over-year in both March and April.1

“In the most recent period, the number of gallons that customers fill up with when they come to our fuel stations fell below 10 for the first time since 2022,” said Walmart CFO John David Rainey on the company’s quarterly earnings call last month.2 Bob Eddy, CEO of BJ’s Wholesale Club (BJ), told analysts his company had observed “some modest shifts in behavior” among consumers visiting its gas stations, “with average gallons per fill-up slightly lower.”3

Why This Is Important

Gas prices have risen sharply this year, pressuring the finances of low-income consumers and driving them to ramp up their search for deals and value. High gas prices are both a potent reminder of rising costs and a driver of consumer inflation, making them a significant headwind to consumer spending.

The national average gas price is up more than 40% since late February, when Iran responded to U.S. and Israeli airstrikes by effectively closing the Strait of Hormuz, a vital trade route through which about a fifth of the world’s seaborne oil passed before the war. The national average price per gallon hit $4.56, a nearly four-year high and just 10% off a record, in early May before moderating slightly in recent weeks.

Soaring gas prices put the most pressure on lower-income consumers, who usually spend more of their disposable income on gas. “We see with our customers that the high-income customer is spending with confidence into many categories, while the lower income consumer is more budget conscious and perhaps navigating financial distress,” said Walmart’s Rainey.

The search for value is making wholesale clubs go-to gas stations. According to Placer.ai, gas station traffic has declined year-over-year every week since mid-April. Meanwhile, visits to wholesale club gas stations rose double digits throughout most of April.1 BJ’s “comparable gallon growth”—the gas station equivalent of comparable store sales—surged from 1% in February to 10% in March and April, suggesting some members put extra effort into a search for cheaper gas.3