US Consumers Continue Buying Despite Gas Price Hike

American consumers continued buying in May despite a rise in gasoline prices, according to the latest findings of the NRF Executive Opinion Survey, a monthly index published by the National Retail Federation (NRF).

The Retail Sector Performance Index (RSPI) continued its strong showing in May with a reading of 59.6 points, up 12.1 points from a year ago and a 1.4 point rise on April.

The RSPI measures retail executives' evaluations of monthly sales, customer traffic, the average transaction per customer, employment, inventories and a six-month-ahead sales outlook expectation. The RSPI is based on a scale of 0-100 with 50 equaling normal.

"It may cost more to drive to the stores, but consumers are still shopping," said NRF President and CEO Tracy Mullin. "Consumers have told us they would scale back some spending as gas prices increase, but the shift does not appear to be dramatic."

Meanwhile, retailers remained in the driver's seat in terms of pricing power in May. The Pricing Index set a new high with a reading of 59.6 points, slightly up from last month's 58.8 points.

"As pricing power increases for retailers, we are seeing less reliance on deep discounts to drive sales," said Mullin. "This should result in a better profit picture for retailers in the months ahead."

The positive retail outlook extends beyond the summer as the six-month outlook for retail also set a new high. The Demand Outlook, a six-month outlook for sales, posted its strongest reading (65.4) since the survey started in September 2002.