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How consumer on-trade spend could top 2016 this Christmas

Published:  13 October, 2017

Forecasters are predicting that bars and pubs could be set to exceed last year's Christmas takings, despite continued “shaky” consumer confidence post-Brexit.

As the temperature cools, things are hotting up on the approach to the festive season when the on-trade sees an annual spike in sales of cocktails, mulled wine and sparkling.

And although pubs, restaurants and bars across the UK may face an uncertain trading environment this Christmas, according to on-trade analysts CGA, consumers are still likely to match or exceed the £562m spent on alcohol in the 12 final weeks of 2016.

CGA predicts that yuletide out of home food and drink sales are still likely to echo those of 2016, when fewer people went out but those that did went out more often and spent more.

Last year, the number of people visiting the on-trade over Christmas dropped by 4%. However, value of sales rose 4.4% on the previous year.

This was in contrast to value food sales, which dipped by 0.7%.

During Christmas 2016, drinks sales accounted for 55% of the total sales mix through the on-trade - a one percentage point rise over its share of sales in 2015.

“Last year consumer confidence was muted pre-Brexit. This year consumer confidence is still shaky so it’s unclear if consumers will rein-in spending or want to treat themselves,” said Phillip Montgomery, CGA client director for drinks.

However, consumers are still expected to pay some 211 million visits to pubs, bars, and restaurants according to CGA.

To exceed last year’s £0.5bn wet sales, Montgomery encouraged operators during this “crucial time” to maximise the additional footfall by encouraging customers to trade-up with promotions, new products and offers.

While sales of hot alcoholic drinks, sparkling wine, cocktails and Champagne remain the usual Christmas favourites, spirits came out on on top once again last year and are expected to do the same in 2017. 

According to CGA’s research, spirits accounted for 18.9% of total serves - an increase of nearly 4% against an average four-week period.

Vodka, dark rum, blended whisky, gin, tequila and non-cream liqueurs see the biggest trade-up.

“For operators Christmas is an opportunity to leverage sales through their premium offer and suppliers should help with ranging decisions,” Montgomery added.

“It’s also essential to have engaging bar staff and good POS material promoting your offers – our research showed that 57% of consumers noticed outlet promotions, so it’s important to plan early and promote your offer clearly and effectively.”