Diageo to focus on supermarket sales

Diageo has announced its intention to focus its UK marketing activities on driving supermarket sales as the recession continues to impact on-trade activity.

According to Simon Litherland, UK managing director, the move is the result of reduced disposable income among customers, leading to them seeking cheaper substitutes for on-site alcohol consumption.

With supermarkets charging minimal prices, customers are attracted to the cheaper alternative, he said.

Figures from Official National Statistics show a 4% increase in supermarket alcohol consumption to 29% of the UK’s population, following a 17% increase in supermarkets introducing 24-hour licensing from 2009.

Diageo is looking to establish “collaborative relationships” with the UK’s largest retailers in order to maintain growth in the off trade market and “get the right share of promotions and the right share of display in stores."

Paul Walsh, Diageo chief executive, intends to capitalise on this trend, saying: “In the UK there’s a gradual move towards off-premises drinking and we think that will continue.”

Despite pressure from health campaigners on the effects of binge drinking, the company does not believe minimum pricing would be the answer to problem drinking in the UK and instead favours a focus on national health campaigns and enforcing legislation on underage drinking.

Natalie Verdeystert, 22.02.2010