retail news in context, analysis with attitude

The Wall Street Journal reports that continually increasing gasoline prices “are a double-edged sword for warehouse-style retailers such as Costco Wholesale Corp. and for fuel-producing companies like Valero Energy Corp. While higher prices at the pump bring higher revenue from fuel sales, they can also deter consumer confidence and discretionary spending.”

And the New York Times writes that “gas prices are approaching record highs, but so far most Americans do not appear to be drastically cutting back their driving or even their spending as they did in 2008.

“The question, economists agreed, is what happens if prices continue to go up and remain high. Prices for a gallon of regular unleaded gas are topping $4 at more service stations nationwide, revisiting the bleak territory of three years ago, when the average price for a gallon of regular gas reached a peak of $4.11 on July 17, 2008, according to the Oil Price Information Service.”

“At some point,” the Journal writes, “Americans ... will cut back on driving.”
KC's View:
At some point?

Oy.

The economy may seem to be coming back, but it isn’t hard to imagine that soaring gas prices could bring the whole thing down. It’ll be okay, though ... the top executives at the oil companies no doubt will emerge from it all with bonuses intact. Good thing - they’ll be the only ones able to afford to drive their cars.