Kantar: UK booze sales up £261m – but online and convenience stores biggest winners

UK consumers spent an extra £261 million on alcohol to drink at home last month, a rise from the previous month, but convenience stores and online are still the fastest growing channels, according to Kantar.

Young woman shopping in the supermarket wine shelves

Speaking to the drinks business this morning, Fraser McKevitt, head of retail and consumer insight at Kantar, said booze sales were growing ahead of the market, rising up 28% in the last four weeks versus the same period last year, a rise of 4 percentage points from last month. This was double the rate of wider grocery, which rose 2% compared to last month.

In terms of channel split, internet sales have more than doubled compared to last year. The analyst said there was a “definite” appetite to buy alcohol online, with alcohol “slowly taking up a larger part of the online basket”.

Convenience stores are also seeing strong alcohol sales. Overall grocery in the convenience channel rose10% in this period, compared to 28% for alcohol.

“I think that speaks to people going to the c-store for a bit of spontaneity, they are not doing weekly shop there, but they can’t or don’t’ want to go to the pub so pop into the local Co-op or Budgens,” he said.

The stand out categories were spirits, up 35%, especially gin and branded rums, non-alcoholic beers (up 38% from a small base) and SABs.

“There is a lot of innovation around that sector with hard seltzers so I wouldn’t put that down specifically to anything Covid-related but a continuation of that trend,” McKevitt said.

Brands were still the main beneficiaries – something that is not unique to alcohol, McKevitt pointed out, but retailer were hitting back by pushing their premium own-label lines.

“What is interesting is that it is pretty small premium own label in this sector and that is growing fastest of all,” McKevitt noted. “It is only 2% of sales, but it is growing quickly. I think that is a retailer led trend to get their highest priced own label on shelf and visible and provide a viable alternative to brands at the often cheaper price, although not always.”

One surprise was that whereas “one would immediately jump to conclusion is that it’s all young people who aren’t going to the pub who are stocking up on booze”, McKevitt said the fastest growth was coming from families with older children.

He said that while shoppers were moving a greater proportion of their eating and drinking back into the home, there was an element that it was “not just about pubs” and the new 10pm curfew.

“It’s about restaurants and people treating themselves if they can’t go out as much – I imagine young people will stay in a watch Netflix, whereas older parents will settle down with a glass of wine,” he added.

“This demographic was also consistent with the rise of online sales. “Families tend to use e-commerce to buy grocery and alcohol is slowly taking up a larger part of the online basket.”

As a result, it was difficult to “disentangle” the new 10pm pub curfew from other Covid-related developments such as local lockdowns, and people’s awareness of the situation. “You can’t pinpoint ‘this is where the 10pm curfew happened,’ so it’s all mixed in together,” he said.

In terms of regional growth, Wales, which has seen some of the most rigid lockdown measures, saw the fastest growth.

Wider grocer

Take-home grocery sales growth accelerated to 6% in the four weeks to 4 October, which Kantar said showed shoppers gearing up for new lockdown restrictions, although there was “limited evidence” of stockpiling. The last full week of September (21 – 27 September) was the grocery market’s busiest since March, but only 107 million trips were recorded, compared to 75 million just before lockdown. Meanwhile, online sales in the past month grew by 76% year-on-year.

Meanwhile the market share of online grocery market had continued to be stable at around 12.5%, which Kantar said suggested that  shoppers are choosing to stick with deliveries as the pandemic develops.  

Ocado’s new deal with M&S – which saw the online retailer up its range of wines – helped attract 22,000 new customers to the online player, boosting its market share by by 0.4 percentage points to 1.8%.

Meanwhile Ocado’s erstwhile partner, Waitrose, continued to “keep pace with its own online offer”, McKevitt said. “Although starting from a relatively low base, it was once again the fastest growing retailer online this month.” In addition Waitrose also increased sales through its physical stores by 8.9%.

Discounter Lidl continued to see double-digit growth – an ongoing trend since December – accelerating this to 11.7% in the in the past 12 weeks, ahead of Aldi, which saw sales growth of 7.8%. Its market share remained stead at 8.0%.

The convenience channel – which has done particularly well during the pandemic as customers shop more locally – saw a fall in its annual growth rates, and is now back in line with the wider grocery market.