Off-trade sales drop as on-trade returns and cost of living rises - Kantar

woman looking at wine bottles in a shop

Kantar’s latest beer, wine and spirits (BWS) spending data has indicated a decline across all categories, with beer & lager showing the largest drop (11.6%) over the 12 weeks ending August 7, compared to the same period in 2021. 

The data analytics company recorded a decrease in sales across wine, spirits beer & lager, cider, sparkling wine and RTDs compared to 2021. The total off-trade BWS category saw a 7.9% decrease in sales during the 12 week period, with a 4.2% decline during the 4 weeks ending August 7, compared to the same weeks in 2021. 

Kantar’s head of alcohol, Richard Lee, told Drinks Retailing that the decrease in sales could be attributed to both the cost of living crisis, and the ongoing regrowth of the on-trade following the Covid pandemic.

“Lots of drinking occasions would have been happening at home for the last couple of years, and have somewhat returned to the on-trade.”

However, he confirmed that the BWS category as a whole is still in “good health” despite the apparent drop in sales.

“Compared to 2019, we’ve still seen the overall alcohol category go up by 13% in terms of value - we have seen some short term declines, but versus pre-Covid, we're still seeing double digit growth across every category,” he said. 

In terms of beer & lager, Lee noted that on-trade sales may represent a larger proportion of the category: “Beer is arguably the quintessential on-trade category, and so with the wider context of consumers returning to the on-trade, that’s likely to be reflected in these numbers.”

Sparkling wine saw a notable decline in sales. During the 4 week period ending August 7, sparkling wine sales dipped 12.2%. However, Lee suggested that the Platinum Jubilee and run-up to summer may be behind this.

“There may be some residual purchasing that took place in the previous four week period that perhaps means shoppers haven't needed to return to that category quite so quickly,” he said. “In general, sparkling wine is a sector where we’ve seen falling shopping numbers, which likely accounts for the majority of the decline.”

As the cost of living crisis leaves many consumers tightening their purse strings, Lee highlighted that alcohol is facing “relatively low levels of inflation compared to some other categories within FMCG”. But as alcohol remains a more expensive grocery product, Lee mentioned that products across BWS are “slightly more vulnerable to being dropped from the baskets by virtue of it being a more expensive, individual purchase item”.

He concluded that there is “nothing to be too concerned about” in terms of the drinks industry, as “any kind of higher ticket item, not just alcohol, will really need to justify its place in the basket to avoid shoppers removing it”.  

Looking to the future, he says that concerned retailers need to keep in mind the long-term trends in both BWS and FMCG as a whole: “BWS is still in really strong health, and we’ve seen growth across every single household category.”

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