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News
Credit crunch yet to affect UK off-trade
Latest statistics published by Nielsen have indicated that the UK off-trade is riding the storm of the current economic climate, with year on year volumes up 3%. But the on-trade, by comparison, is struggling with a 7.9% dip in volume. In the report the market analyst described 2008 as “one of the worst years in living memory” for the pub trade.
“At present we are seeing beer and spirits performing relatively well in the take home market and cider sales have grown in excess of 15% in the last year,” says Nielsen marketing director Jake Shepherd.
Interestingly, while wine sales appear to have stagnated with volume growth of just 1.1%, this is set against value growth on 4.6%, suggesting that off-trade consumers are prepared to pay more for wine. Shepherd explains that this trend towards more premium wines is the result of sub-£3 wines increasing their prices as well as “consumers who are staying in to drink as an alternative to going out treating themselves to more expensive wines.”
However, while the off-trade is performing admirably, the prognosis for the on-trade is far more bleak. Every drinks category has experienced decline in both volume and value, with the notable exception of cider, which has posted a modest value gain (though this also represents a massive decrease compared to last year’s growth of 30%). “Our sales figures show that 2008 has been worse than 2007. With people cutting back on unnecessary expenses and another dreadful July and August weather-wise, we don’t expect this trend to alter.”
As well as reporting the sales decline, Nielsen has also conducted consumer research on spending patterns. 30% fewer consumers said that they are spending disposable income on going out than did in 2005 and 2006.
On a more positive note, the study has revealed that drinks are not subject to the runaway inflation that is impacting on other consumable categories. According to Nielsen numbers category inflation is up by around 2% for the last year and just over 3% for the last quarter (which includes the latest duty hike). By comparison, food inflation was up by 9.5% in July.
Ben Grant, 27/08/08