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Alcohol sales slump by €2.7bn for European retailers, report says

30 January 2023 By Eloise Feilden

Analysis from the IRI revealed a €2.7 billion alcohol sales slump in retailers across Europe as consumers attempt to moderate the impact of inflation by cutting discretionary purchases.

The €2.7 billion sales fall is equivalent to a 4% decline for beer, wine and spirits in 2022, taking the total category sales value for the year to €66 billion.

Value sales for retailers including supermarkets, discounters, convenience stores and off-licenses saw a sharp rise of 12.6% in 2020, driven by consumer demand during the first year of the pandemic.

However, the rise in off-trade sales became less sustainable as on-premise venues began to open up in 2021. Although a marginal 0.7% value sales increase added €500mn to the category in Europe, this did not compare to the surge in 2020 and was an early indicator of unsustainable sales growth, IRI has said.

As the price of all groceries are predicted to remain high during 2023, IRI predicts that alcohol sales – both at home and at out-of-home venues – are unlikely to grow.

Ananda Roy, global SVP, strategic growth insights at IRI, said of the figures: “It is increasingly evident that underlying demand has changed in response to post-pandemic trends with new consumption patterns and choices impacting how the category grows over the next few years.”

“Alcohol brands are caught in a perfect storm with no end in sight. Alcohol sales tend to peak during a recession as consumers eat in instead of out.

“However, this recession is fueled by a perfect storm of exceptionally high food and energy prices, record interest rate rises and anaemic wage growth. Households are having to make tradeoffs to moderate its impact on their available income, prioritising food staples and small indulgent treats over discretionary items like alcohol. Alcohol sales are now lower than pre-pandemic levels.”

IRI, the data and analytics firm for FMCG brands and retailers, analysed the impact of the pandemic, inflation and the cost-of-living crisis on 230 FMCG categories, 2000+ product segments and over a 100 million SKUs sold to consumers in the largest European markets — France, Italy, Germany, Spain, Netherlands and the UK.

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