When days get shorter so do consumers' budgets, report says

Key Points
  • The end of daylight saving time causes consumers to spend less at the expense of retailers.
  • The transition may be bad for business, but researchers don't know how long lasting the effects are.
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Shoppers can expect to spend less this month, because it gets darker earlier. So, as daylight saving time ends, waving goodbye to those long days could actually help shoppers save – at the expense of retail businesses.

According to a report by JPMorgan Chase Institute, shoppers spend 3.5 percent less in grocery stores, gas stations and at retailers in the month following the end of daylight saving time. That percentage may not seem like much, but to businesses it can be a big deal.

"One business owner said she felt the sky was falling that month and was racking her brain about what was happening," said Marvin Monroe Ward Jr., a JPMorgan Chase researcher who worked on the study.

By comparing shopping habits in Phoenix, which does not use daylight saving time, to shopping habits in Los Angeles, Denver and San Diego, which do, researchers found that consumers make fewer trips to stores, resulting in fewer overall purchases.

In Los Angeles, for example, shoppers spent about 4.6 percent less on fuel, 4.8 percent less at retail stores and 5.9 percent less at grocery stores in the 30 days following the end of daylight saving time.

But if fewer impulse buys mean fuller wallets, do fuller wallets mean happier consumers? Not necessarily. Researchers believe the damage to businesses likely outweighs any perceived benefit to consumers.

"This is almost a subconscious thing. The shift in [consumers'] minds is largely consistent with their environment, in this case, less sunshine," Ward said.

Despite indicators that daylight saving time may be tough on retailers, the National Retail Federation is historically on board. The organization, which represents retailers across more than 45 countries, including the U.S., "strongly supports" daylight saving time, according to spokesperson Craig Shearman.

The U.S. adopted daylight saving time in 1918 to help reduce the cost of energy. Longer days, the U.S. Department of Transportation proposed, meant reduced electricity for lighting and appliances, with added bonuses of less crime and fewer traffic accidents.

Advocates also argue the yearly ritual boosts the economy by providing more hours during which consumers will be out spending money.

Ward's study seems to refute that claim, at least for the 30 days following the transition into or out of daylight saving time. But since researchers only looked at two months, rather than the stretches of time between the transitions, they can't say how lasting an impact the time change had on businesses.