What CFOs and CEOs are saying about gas prices

Move over, watercooler talk. There’s a new hotspot in town: The gas pump.

As the war in Iran sends gas prices into the stratosphere—the average price nationally is now over $4.50 per gallon—CFOs from a wide range of industries are addressing the elephant at the gas pump head-on.

Of course, it’s about more than gas. High gas prices typically hit low-income households first, experts say. “Lower-income households have a higher share of gas spending in their budget, and they save less, so when they get hit by a gasoline shock in a lower-income household, it’s more painful,” David Tinsley, senior economist at the Bank of America Institute, told us.

Given ongoing challenges facing low income consumers, companies trying to emphasize affordability and value are in a tight spot. And the fact that consumers across the spectrum are revealing a decidedly sour read on the economy—consumer sentiment hit a new low in May, largely on the back of gas prices—only adds to the difficulties.

Nearly three of four car owners (72%) polled by Numerator in April said rising gas prices have caused them to cut back on spending in other categories, including dining and takeout (43%) and groceries (30%).

Gas pump talk. So, what did CFOs and executives have to say about it in the wake of Q1?

During the company’s May 7 earnings call, McDonald’s CEO Christopher Kempczinski noted the unique impact of gas prices on low income consumers, which the company has been trying to recapture with value offerings. “We expect the pressures there are going to continue,” Kempczinski said.

Over at Chipotle, meanwhile, CFO Adam Rymer said during the company’s April 29 earnings call that “in March, there was a little bit of softening in our trends right around the time where the Iran conflict began,” noting that there had since been an improvement in sales.

Others were seemingly less concerned. When asked on a May 7 earnings call if he’d seen any changes in consumer behavior “that might be tied to higher gas prices and the Iran conflict,” Shake Shack CEO Robert Lynch said the company “had relatively consistent sales rates throughout the quarter.”

“We didn’t see significant changes,” he continued. “We did see a little bit of softening in the back half of March, but not at a significant rate.”

The message was similar at the Cheesecake Factory, which reported Q1 earnings on April 29. In response to a question about gas prices, CFO Matthew Clark said same-store sales “were pretty steady throughout the quarter.”

“There’s a little bit of spring break movement, but even that was probably more muted than we thought,” he said. “It was very balanced throughout the quarter, and we didn’t see any trade-down either.”

This could be the calm before the storm, though. On Wednesday, the Labor Department reported the producer price index climbed 1.4% in April, the largest monthly gain in over four years, per the Associated Press, with energy prices, gasoline, and diesel all jumping for the month as well.

In any case, plenty for CFOs to chat about at the gas pump watercooler.