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HK off-trade ‘full recovery’ by 2024 — but on-trade ‘still cautious’
The Hong Kong off-trade is expected to make a full post-Covid recovery of business by 2024, but the on-trade is still cautious of progress, said industry veteran Rob Temple.
Temple, general manager of Asia Wine Service & Education Centre, made the comments as he delivered an optimistic report on the Hong Kong wine trade recovery post-Covid.
“Historically, Hong Kong is very quick to recover from crisis,” said Temple at a presentation during Vinexpo Asia in Singapore from 23-25 May.
Temple has lived and worked in Hong Kong for over 30 years and has witnessed the highs and lows of SARS virus, the 2008 financial crisis and now Covid.
During his career, he has held various leadership positions at ASC Wines, Sarment, and is now the general manager for Asia’s largest wine education provider.
The off-trade sector registered a drop of 20% in sales from pre-covid years. Based on his conversations with the leading wine retailers, he said the industry estimates a full recovery by early 2024.
The on-trade sector, in contrast, is more cautious. Government reports indicate that restaurants and bars have suffered a 47% drop in wine sales from 2019.
While all restrictions were lifted for restaurants and bars in December 2022, on-trade sales haven’t bounced back as the foot-traffic hinges on both local diners and international tourists.
The latter – the international tourist – hasn’t returned in full force yet. “Pre-covid, Hong Kong saw 5.5 million tourists a month, and we are nowhere near that,” said Temple, and noted that there is no sign of the “cash-rich, time-poor travellers” who spent the most on dining.
As a result, premium fine wine sales at restaurants continue to be soft.
As for the local diners, they have developed “less tolerance for markups at restaurants”.
“It’s very dynamic at the moment. Consumers are concerned about price. They want to have quality, and they’re prepared to shop around for it. So, there’s a lot of exploration now and no brand loyalty. It is a time for brand owners to be busy,” said the seasoned market expert.
The restaurant’s wine program reflects the attitude change, and notably, the current wine lists are more mid-priced and curated. “Curated is a euphemism for removing wines that are more visible in retail,” he highlighted.
Regarding online sales, he observed that while online sales grew in the Covid years of 2019-22 for well-known brands, consumers were back to bricks and mortar shops as the city.
“Online sales in Hong Kong is difficult. Retailers with online arms found that consumers have gone back to retail,” he said.
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