Driving, gas prices and the end of retail

at 03:00 PM ET, 02/18/2012

Americans have cut way back on driving in recent years. Total vehicle-miles traveled has stagnated since 2007. One big question is whether this is a temporary blip due to the downturn — unemployed people, after all, don’t commute — or evidence of a long-term structural shift.

Should’ve just ordered it on Amazon. (Michael Robinson-Chavez)
Theories for a structural shift generally involve demographics: America’s swelling ranks of retirees don’t drive as much, while kids these days prefer Facebook to motoring around with friends. But there’s another possible factor: the torrid growth of online shopping. Phil Izzo has the numbers, which are striking. In the fourth quarter of 2011, e-commerce surged to 5.5 percent of all retail sales — and, if anything, that understates the trend, since brick-and-mortar stores include online sales in their own figures. When people order from their computers, of course, they save themselves a trip to the store.

Analysts attribute the sharp rise in online shopping to the fact that more Americans are comfortable buying online, while smart phones and tablets have made it increasingly simple to shop. That seems plausible. But it’s also worth pondering whether high gas prices have played a supporting role here. It’s striking that, according to this graph, U.S. brick-and-mortar stores first began their steady decline in retail share right around the time that $3.50-per-gallon gasoline became the norm.

By the way, Izzo notes that the one physical outlet that’s increased its share of retail has been . . . the gas station. In 1999, gas stations represented 7 percent of all retail sales, climbing to 11 percent by the last quarter of 2011. It’s yet another indicator that rising prices at the pump are crowding out consumer spending on other things, hurting the broader U.S. economy. But who knows? If e-commerce continues to surge, and driving keeps stagnating, maybe that dynamic will shift yet again.

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