Out-of-home Drinking - UK - September 2009

Table of Contents

• Issues in the Market
• Key themes
• Definition
• Abbreviations
• Market in Brief
• On-trade alcohol sales growing, but declining in real terms
  • Figure 1: Trends in sales of on- and off-trade alcohol, at constant 2005 prices, 1998-2009
• Beer dominant but wine has been the major growth area
  • Figure 2: Sales of on-trade alcohol, by type of alcohol, 2009
• Panoply of pressures affecting on-trade
• Deep discounting in off-trade provokes emotions
• Recession piles on further misery
• Fighting against the tide?
• Internal Market Environment
• Key points
• Pub closures climb as recession, smoking ban and supply tie overwhelms
  • Figure 3: Net pub closures in the UK, 2005-09
• Beer sales, backbone of the pub, on the wane
  • Figure 4: Trends in the pattern of beer volume sales, by channel, 1999-2009
  • Figure 5: Trends in the percentage distribution of beer volume sales, by channel, 1999-2009
• Rising costs harm on-trade competitiveness
• On- vs off-trade price trends
  • Figure 6: Trends in all prices versus those of alcoholic drinks, by channel, 2004-09
  • Figure 7: Trends in beer and cider prices, 2008 and 2009
  • Figure 8: Trends in real ale and lager prices, by type of pub, 2008 and 2009
• The ties that bind?
• Increased overheads pile on pressure...
  • Figure 9: Trends in the price of food versus all items, 2004-09
  • Figure 10: Trends in the price of gas and electricity* for non-domestic customers, 2004-09
• ...while smoking ban doesn' t help
• Duty calls
  • Figure 11: Trends in levels of alcohol duty, 2004-09
• Competition from in-home drinking
  • Figure 12: Trends in where alcohol is drunk, 2004-08
• ' Home as the hub'
• 24-hour licensing -- help or hindrance?
  • Figure 13: 24-hour licences issued, 2007 and 2008
• Binge drinking and alcohol-related disorder
• Pre-loading
• Combined effect is to reduce appeal of on-trade outlets
• Broader Market Environment
• Key points
• Consumer confidence very weak but showing signs of recovery
  • Figure 14: GfK NOP Consumer Confidence index, May 2008-May 2009
• Disposable incomes and spending under pressure
  • Figure 15: Trends in personal disposable income and consumer expenditure, at constant 2004 prices, 2004-14
• Younger and middle-aged key to on-trade drinking
  • Figure 16: Trends in drinking out of home two or three times a week, by age, 2004-08
  • Figure 17: Structure of the UK 18+ population, by age, 2004-14
• Growth in affluent groups could boost on-trade drinking
  • Figure 18: Changes in socio-economic group amongst the UK 18+ population, 2004-09 and 2009-14
• Market Size
• Key points
  • Figure 19: UK total household expenditure on on-trade alcoholic drinks, 1998-2009
  • Figure 20: UK on-trade alcoholic drinks household expenditure, at current and constant prices, 1998-2009
  • Figure 21: Spending per household on on-trade alcoholic drinks (£ per household in the UK at current prices), 1998-2009
• Beer loses its fizz
  • Figure 22: UK household expenditure on beer for out-of-home drinking, 1998-2009
  • Figure 23: UK household expenditure on beer for out-of-home drinking and share of total out-of-home spend, 1998-2009
• Wine hits a plateau
  • Figure 24: UK household expenditure on wine, cider and perry for out-of-home drinking, 1998-2009
  • Figure 25: UK household expenditure on wine for out-of-home drinking and share of total out-of-home spend, 1998-2009
• Spirits growth falters
  • Figure 26: UK household expenditure on spirits* for out-of-home drinking, 1998-2009
  • Figure 27: UK household expenditure on spirits for out-of-home drinking and share of total out-of-home spend, 1998-2009
• The Impact of the Recession on On-trade Drinking
• Key points
  • Figure 28: Annualised growth in real alcoholic drinks spend for out-of-home drinking compared to total real household expenditure, Q1 1985-Q1 2009
  • Figure 29: Share of total household expenditure taken by alcohol for out-of-home drinking (real terms), Q1 1984-Q1 2009
  • Figure 30: Items being cut back on in the recession, February 2009
  • Figure 31: How the amount of drinking out of home has changed in the past 12 months, April 2009
  • Figure 32: Net percentage decline in out-of-home drinking by adults in the past 12 months, by age and lifestage, April 2009
  • Figure 33: Net percentage decline in out-of-home drinking by adults in the past 12 months, by socio-economic and ACORN group, April 2009
  • Figure 34: Net percentage decline in out-of-home drinking by adults in the past 12 months, by detailed lifestage, April 2009
  • Figure 35: Consumer switching behaviour between drinking at home and drinking out of home, April 2009
  • Figure 36: Annualised rate of growth in consumer spending on alcohol in the on-trade, by type, Q1 2005-Q1 2009
  • Figure 37: Change in out-of-home alcohol consumption in the past 12 months, by types of alcohol usually drunk, April 2009
• How do recessionary cutbacks manifest themselves?
  • Figure 38: Impact of recession on pub visiting, April 2009
• Majority are unaffected
• Going less often...
• ...eating out less...
• ...and pre-loading...
• ...but not trading down
• The Consumer -- Competitive Context
• Key points
• What do people drink out of home?
  • Figure 39: Types of alcohol, by where drink alcohol, 2008
  • Figure 40: Trends in penetration of drinks consumed elsewhere, 2004-08
• Young prefer lighter drinks
  • Figure 41: Popular out-of-home drinks among under-35s, 2008
• Middle-aged have middle-of-the-road tastes
  • Figure 42: Popular out-of-home drinks among 35-54-year-olds, 2008
• Older drinkers are more traditional in their tastes
  • Figure 43: Popular out-of-home drinks among over-55s, 2008
• Long-term trends highlight emergence of wine as an on-trade sector
  • Figure 44: Share of on-trade alcohol market, by broad sector, at current prices, 1963-2009
• Who Drinks in the On-trade?
• Key points
• On- versus off-trade drinking
  • Figure 45: Trends for drinking alcohol out of home versus in home, 2004-08
• On-trade drinkers
  • Figure 46: Penetration of on-trade drinking, by gender, age and lifestage, 2008
  • Figure 47: Penetration of on-trade drinking, by socio-economic group and Mintel' s Special Groups, 2008
• Who are the most valuable on-trade drinkers?
  • Figure 48: Ten most valuable consumer groups for on-trade drinking of alcohol according to VII, by demographic group, 2008
• Appendix -- Impact of the Recession on On-Trade Drinking
  • Figure 55: Impact of recession on pub visiting, by demographics, April 2009
• Appendix -- Competitive Context
  • Figure 56: Elsewhere drinkers, by demographics, by weight of usage, 2008
  • Figure 57: Types of alcohol drunk elsewhere, by demographics, 2008
  • Figure 58: Types of alcohol drunk elsewhere, by demographics, 2008