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‘Christmas hangover’ hits on-trade spirits sales

Sales of spirits in the British on-trade have suffered a ‘Christmas hangover’ according to CGA by NIQ, dropping by 18% in the year’s first full week of trading.

UK on-trade
Spirits sales in the UK on-trade fell by 18% in the seven days to 11 January

Using data from CGA’s Daily Drinks Tracker, which monitors sales at managed licences premises across the UK, spirits were shown to have the biggest drop to start the year, in comparison to other drink categories such as beer (down 7%), cider (down 8%) and wine (down 8%).

Overall, drink sales were down by 8% in the seven days to 11 January 2024, which CGA noted was a ‘contrast’ to the final two weeks of 2024, when drinks sales climbed by by 4% and 8% respectively year-on-year.

Across the week, Friday 10 (down 8%) and Saturday 11 (down 10%) experienced sales shortfalls, while the largest drop took place on Sunday 5 (down 17%), which incidentally was also the day before many people resumed work after the holiday break.

While a drop was expected following Christmas and New Year’s late sales surges, Rachel Weller, CGA by NIQ’s commercial lead, UK and Ireland, said “the consistency of drops across days of the week and categories suggests consumers are keeping a tighter lid than usual on their drinking and spending”.

She added: “Operators and suppliers always have to work very hard to attract people out of their homes and into venues at this time of year, but we can be optimistic that people will start to feel more money in their pockets after January paydays.”

Pricing ‘biggest challenge’ for 2025

On a guest appearance on the Morning Advertiser podcast, Weller gave insight on the trends that could chart consumer behaviour in Britain’s on-trade for the year and what venues can do in a ‘challenging market environment’.

She observed that value for money is the main motivator when it comes to choosing drinks and this is a challenge for spirits, particularly with gin and cocktails, which ‘struggle with value perception’.

Additionally, she believes rum and Tequila will lead the way as top spirits choices. Rum for its ‘versatile mixability’ and Instagram-friendly nature, which creates an upscale experience. Tequila, for the Margarita’s ongoing popularity and the category’s celebrity-endorsed brands.

For experiences, consumers, especially Gen Z, are continuing to seek out health-conscious drink occasions, such as the concept of ‘zebra striping’ where one switches between alcoholic and non-alcoholic drinks. This, CGA said, helps them ‘prolong social outings while managing their spending’.

Lastly, venues that have ‘immersive, experience-led occasions’ in their offerings will find success, as socialising is still the main reason for people to go out and spend time in a venue. One example highlighted are competitive socialising venues, which tick the ‘fun, high-quality and interactive’ aspects that consumers are willing to spend money on. The nature of competitive socialising venues also means longer visits from consumers, which in turn, brings higher revenue opportunities.

Weller commented: “The biggest challenge for the on-trade in 2025 will be effectively communicating pricing and value for money.

“Operators need to balance entry-level pricing so they don’t alienate cost-conscious consumers, while also offering clear trade-up opportunities. Storytelling around product quality and experience is integral to this strategy.”

Last week, CGA by NIQ data revealed the UK has lost nearly 28,000 licensed venues since March 2020.

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