As the UK lockdown continues into its fifth week, and
both the start and end-dates of the quarantine seem to get
further away, the impact on the UK’s pubs and nightlife sector is
having to be continually reassessed. In terms of local currency
units (LCU) value, when adjusting for COVID-19, GlobalData’s
projections for the growth of theUK alcoholic
beverages market have been cut. Beer and cider has dropped from a
baseline value growth of +1.7% to a COVID-19-adjusted forecast of
-6.7%. Similarly, wine has dropped from +2.7% to -8.5%, and
spirits has gone from +5.1% to -6.9%*.
Fred Diamond, Consumer Analyst at GlobalData,
commented: “The projections for
the UK alcohol industry have been reduced as a result of the
price of a pint being significantly more than the price of the
same beer in a can from a shop. Although there has been a drop in
all three categories, the types of companies selling alcohol has
shifted. Pubs sales have plummeted, so the onus is on other
channels, which are having to greatly expand their sales capacity
to meet the spike in demand.”
GlobalData’s COVID-19 consumer survey shows that 28%
of 35-44 year olds are buying more beer than before, while 24%
are buying less, with similar occurring for wine and
spirits**.
Diamond continues: ‘‘The Gen X age group is
particularly interesting, as these people are likely to visit
pubs and bars as frequently as younger people, but typically have
more money and are willing to spend it on more premium products
in the form of craft-ales and up-market wines and
spirits.”
Subscription services such as Beer52, Flavourly and
BeerBods are cashing in on the portion of the population who are
working from home and have extra money to spend on luxury and
premium products. As for those on 80% of their wage, local
off-licences have taken the initiative and are offering delivery
services.
Diamond adds: “Those who are buying less are likely
social drinkers. After the lockdown, it is not certain if these
people will return to the pubs and bars they once frequented as
they may have adjusted to a lower-alcohol lifestyle. As for those
buying more, there is a chance that the value for money and
personalized choice they get from online shops and premium
subscription services will result in less frequent alcohol-based
outings. The end result may see
consumers prefer the easily accessible subscriptions they’ve
become accustomed to over a pricey bar – the difference will be
how operators market the ‘experience’ over the
product.”
* – GlobalData’s Coronavirus (COVID-19) Tracker
Consumer Survey – Week 4 – UK
** – GlobalData’s COVID-19: COVID-19 Impact Market
Model – Consumer Goods – LCU value
- data is adjusted weekly following COVID-19
developments, therefore subject to change
