Watching the Gas Gauge
By Seth Mendelson
January 9, 2013

Gas prices going down?

Not so fast, many industry observers say. After dipping to nearly $3 a gallon in some states, the price of a gallon of gas has increased by about 15 to 20 cents in recent weeks. The result could hit retailers hard as consumers, once again, cut back on discretionary spending to pay their fuel bills.

Pet retailers are in an interesting position here. On one hand, they are protected by the fact that consumers have shown they will not cut back on food purchases for their animals. On the other hand, the sales of pet supplies and accessories are extremely vulnerable to any chance in consumer shopping sentiment.

So now what? Observers continue to stress that retailers stay extremely aggressive on the promotional front, offering consumers as many deals as necessary to keep them coming back into their stores. They also say that retailers need to look for lower-priced alternatives in some cases, especially with supplies and accessories.

Most importantly, retailers should keep an eye on the gas pump. If prices keep going up, they will have to be more promotionally oriented, especially through the winter months. If they fall again, and they might, the pressure may ease up a bit.