Economy Hurts On-Premise Drinking
Research from the Nielsen company and Bevinco indicates that fewer consumers are drinking at bars, restaurants and nightclubs and that on-premise sales of alcoholic beverages have been “considerably impacted” by the declining economy.
LESS CONSUMER TRAFFIC. More than 40% of bar managers, bar owners, and bartenders surveyed say they have seen a decrease in consumer traffic, while 25% note a decrease in the number of drinks ordered and 22% say that customers are ordering less expensive drinks. The casual dining sector appears to be the hardest hit, with 46% of respondents in this area reporting a decline.
Consumers say they are cutting back too. About 66% of fine dining patrons admit they are going out less often compared to a year ago, while 65% of nightclub patrons, 55% of bar patrons, 59% of casino and resort patrons and 52% of casual dining visitors said the same thing.
On-premise venues on the East and West coasts report the greatest declines, with owners and operators in California and Florida citing significant decreases in consumer traffic: 55% and 52% respectively. Slightly more than half of Texas operators report a decrease in consumer traffic, while nearly one-third see patrons ordering less expensive drinks. In addition, 43% of Florida operators say they’ve experienced a decrease in the number of drinks ordered. Just one-third of establishments in Florida and California claim no impact overall.
BEER FAIRS THE BEST. According to Nielsen and Bevinco’s research, beer sales are affected the least by the economic downturn, with wine sales showing the most impact. Nearly half of people surveyed rated beer as having the “best” sales trend of the three categories, followed by spirits at 40%, while only 11% cited wine as having the best sales trend of the three.
“Wine is more likely to be consumed in dining establishments, which have been more heavily impacted by the economy than bars or nightclubs,” said Nielsen VP Danny Brager. “At the same time, beer and spirit companies vigorously market their product to bartenders, likely resulting in greater ‘share of mind’ compared to wine among servers and bartenders.”
SEEKING CHEAPER ALTERNATIVES. Fourteen percent of operators report customers are ordering more well or house drinks, while 13% report greater sales of beer “on draft” rather than in bottles. Wine drinkers are increasingly opting for house varieties more often than before, according to 9% of operators surveyed.