The major retail groups are excellent indicators of future trends in chemical consumption.
Since before the Crisis began, consumers have been focusing more on price and value-for money. Now Wal-Mart is reporting that consumers face “more pressure than a year ago“.
This suggests that demand destruction is already well underway. And Wal-Mart CEO Mike Duke notes they are seeing:
• More shopping at the start of the month, after paychecks arrive
• More use of online comparison shopping, to identify low prices
• Food price inflation is having a major impact
• However, consumer electronics sales are benefiting from lower prices
Duke added that higher fuel costs are a major factor.
The problem is that average US gasoline prices are already close to their all-time high in 2008 of $4.16/gal, even though crude oil is still $35/bbl below its peak. This is because of lower refinery operating rates. Duke noted these high prices “are really having an impact on the consumer“.