Consumers Seek Alcohol Savings

Published on October 19, 2009 | Comments: 0
According to recent Nielsen research, U.S. consumers are becoming increasingly price-conscious in their purchases of alcoholic beverages. A slight increase in annual sales and a trend toward in-home entertaining offer potential for the alcoholic beverage industry, but drinking establishments and premium brands may suffer. For the 52 weeks ended September 5, 2009, sales of alcoholic beverages rose 2% compared to the same period a year earlier.. Broken down by beverage category, wine sales grew 5.1%, spirits sales grew 2% and beer sales grew 0.7%. More recently, alcoholic beverage sales trends indicate increased consumer price sensitivity. For the 26-week period ended August 22, 2009, domestic wine sales rose 5%, domestic vodka sales rose 8.1%, and domestic beer sales rose 3.2% compared to the same period a year earlier. According to Nielsen, compared to imports the average price of domestic wine is 25% cheaper, the average price of domestic vodka is 50% cheaper and the average price of domestic beer is 35% cheaper. In addition, for the 52-week period ended August 22, 2009, private label wine sales grew more than 20% and private label spirits sales grew more than 10% compared to the same period a year earlier. Decreases in consumer spending at restaurants and bars are contributing to the increase in retail alcoholic beverage sales. Nielsen research indicates that 68% of consumers said they were doing less fine dining and 59% said they were going to bars less often in April 2009. In response, the total number locations selling alcoholic beverages grew by 2,392 stores in August 2009 compared to the year prior. Drug (684 locations), convenience stores (637) and mass merchandisers (432) led the way. On the flip side, the number of U.S. on-premise locations offering alcohol has slipped. In August 2009, there were 944 less bars and clubs and 769 less dining choices than in the year prior. Overall, the number of new locations offering alcohol (on- and off-premise) minus the number of closed locations was 5,445. In May 2009, a Nielsen Homescan Survey revealed consumers are going out to drink less often and spending less on what they drink at home. Survey results indicated that 37% of consumers are going out to bars and clubs less often, and 50% of consumers are actively seeking the best deals when buying alcoholic beverages. Popular strategies include comparing shelf prices, waiting for a sale and taking advantage of other special offers. The survey also revealed 24% of wine drinkers are ordering less-expensive brands, while 33% of beer and spirits drinkers are ordering fewer drinks. In addition, the study shows that once the recession does end, consumers will not necessarily return to their previous alcohol consumption habits. Only 24% of wine drinkers said they will spend more on alcohol when the economy recovers, while 21% of spirits drinkers plan to spend more and 18% of beer drinkers intend to spend more. In one positive sign for restaurants and bars, according to the October American Express Spending and Saving Tracker, 78% of affluent consumers (minimum household income of $100,000) plan to spend the same or more on dining out in the next 30 days than they did last month. In addition, sales at U.S. food services and drinking places registed a mild increase of less than 1% in September, according to U.S. Census Bureau figures.

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