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Nomura Securities on Retailing/Hardlines: Energy and the Consumer

July 5, 2012 10:06 AM EDT Send to a Friend
Nomura Securities on Retailing/Hardlines: Energy and the Consumer

Analyst, Aram Rubinson, said, "To measure the effect of rising energy on overall consumer spending, we estimate household expenditures for four major fuel types—electricity, natural gas, heating oil and gasoline. Current EIA (Energy Information Association) forecasts suggest a windfall to consumers in H2. If EIA forecasts prove accurate, incremental spending on four forms of energy would ‘tax’ consumers by only $2.6bn for the entire 2012 year vs. $80.5bn last year. We estimate that last year’s $80bn ‘tax’ may have stolen 3.0% from traditional retail spending. Additionally, current projections envision peak summer gas prices of $3.54 gallon. The math suggests that every 20¢ increase (or decrease) in full-year prices could steal (or “free up”) 1.0% of retail comp-store sales."




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