Alcohol improves on pre-pandemic growth in multiples

By Jo Gilbert

Published: 29 April, 2022

Inflation and price squeezes have impacted sales of FMCG products in the multiples over the past 12 weeks, including alcohol. However, in actual terms, alcohol is still a more profitable sector than pre-pandemic.

Figures requested from Kantar by Harpers show that alcoholic drinks were worth £3.3bn in the 12 weeks to 17 April 2022. This marks a drop of 14% compared to the equivalent period in 2021 and a 2.6% drop on 2020. However, this still marks a 14.5% gain on 2019, when sales for the period were worth £2.9bn.

The figures come when households are finding shopping baskets increasingly squeezed from inflationary pressures, which are on the rise. According to Kantar, like-for-like grocery price inflation is at 5.9% this month, its highest level since December 2011.

During the most recent 12-week period, sparkling wine felt the brunt of this impact, falling 14.3% to £182m against 2021 – a period when the UK was still under intermittent lockdowns, forcing consumers to stay at home. But again, when comparing 2022 with previous years, sales were still worth more than 2019 when sales were at £157.7m and 2020s £151m.

Still, wine was also up on 2019, when the category was worth £1.2bn. However, sales then went on to be slightly less resilient than sparkling wine in terms of negative growth, with sales in 2022 (£1.31bn) lower than 2021 (£1.47bn) and 2020 (£1.34).

Spirits followed similar trends, with £933.6m in the 2022 period ending up on 2019 and 2020, but down when against 2021.

It’s a relatively positive silver lining for a purely discretionary spend sector, which maintains growth on ‘normal’ pre-pandemic years, even when against this year’s price inflation and other economic impacts.

Fraser McKevitt, head of retail and consumer insight at Kantar, explained: “The average household will now be exposed to a potential price increase of £271 per year. A lot of this is going on non-discretionary, everyday essentials, which will prove difficult to cut back on as budgets are squeezed. We’re seeing a clear flight to value as shoppers watch their pennies. The level of products bought on promotion, currently at 27.3%, has decreased 2.7 percentage points as everyday low price strategies come to the fore. The major retailers are listening to shoppers’ concerns, with Asda launching its Just Essentials line, Morrisons announcing that it is cutting the price of many everyday goods, and Tesco locking in savings through its Clubcard strategy.”

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