Rising gas prices may push more household spending toward Amazon

Higher gas prices could end up benefiting Amazon’s e-commerce business as consumers look for ways to avoid driving to stores and focus more of their spending on household essentials.

Gas prices surpassed $4 a gallon for the first time since 2022 earlier this year, driven by disruptions to oil supply amid the U.S.-Iran war. As of Thursday, the national average for regular gas stands at $4.43, well above the $3.16 average a year ago, according to the American Automobile Association.

The spike has squeezed household budgets and changed how people shop. Consumers are pulling back on discretionary spending: Foot traffic data from Placer.ai shows visits to discretionary retailers declined year over year for the fourth consecutive week as of the week of May 11, while visits to non-discretionary retailers rose for the fourth straight week. Shoppers are gravitating toward warehouse clubs, superstores and off-price chains instead.

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