The value of off-trade alcohol sales in the UK is predicted to grow by double digits to reach £25.5 billion (US$33.8bn) this year due to the rise of at-home drinking.
According to Mintel’s British Lifestyles report, total UK consumer spending is expected to fall by 14.9% to £183.6bn (US$243.8bn) this year due to the coronavirus lockdowns.
However, the three sectors that will experience the biggest increase in consumer spending this year are food, alcohol, and non-alcoholic drinks purchased in off-trade channels.
The alcoholic drinks sector is predicted to increase retail sales by value to 16.3%, equivalent to £3.6bn (US$4.8bn), to reach £25.5bn this year. Spending per household on alcohol is expected to hit £129 (US$171) in 2020. Non-alcoholic drinks is forecast to grow 5.7% this year, compared with 2019.
Jack Duckett, Mintel associate director of consumer lifestyles research, said: “We estimate that retail value sales of alcoholic drinks will grow 16% year on year – the fastest growth rate experienced for at least a decade – to reach £25.5 billion in 2020, as people trade nights out for evenings in.
“In particular, the current recession opens up opportunities for premium own-label drinks to grow in popularity. Learning from previous recessions, consumers know that one way of cutting back is to buy private label. In fact, 18% of premium alcoholic drink buyers would buy premium own-label drinks if their financial position worsened.
“The growth in the size of the older population over the next five years, and the fact that they are most likely to be insulated from the financial impact of the pandemic, makes targeting the ‘grey pound’ particularly timely for all brands, including alcoholic drinks.
“A long heritage (40%), being aged for longer (40%), not being mass produced (34%), and extra care in production (27%) are all factors that feed into over-55s’ perception of what makes an alcoholic drink premium.”
In comparison, the three categories where consumer spending is expected to drop this year are transport, food service and holidays. Consumer spending in these three categories will decline by £140.1bn (US$186bn) in total – representing around 77% of the overall decrease in consumer spending in 2020.
Via The Spirits Business