Landlords shunning drinks offers

“Is this the death of major drinks promotions?” asks Mark Newton, client relations manager at CGA Strategy.

During the first weeks of the New Year, CGA took a snapshot of comments and anecdotes reflecting some of the current thinking from licensees and managers across the country as encountered by its nationwide team of full-time field researchers.

One of the factors which stood out was the decline in drinks promotions. Whether in Bristol or Aberdeen, the reality appears to be that outlets no longer necessarily see major price deals as an easy way to increase footfall or turnover.  

In Anglia, there appear to be very few drinks-related promotions so far. While many of the established branded food-led outlets continue to push meal-based offers, most wet-led venues have few deals available.

Many of the local pub landlords polled suggested that government efforts to discourage binge drinking had sunk in, with several stating it as their primary reason for not running major multi-purchase promotions this year.

Further west, along the M4 corridor, many of the responses received were directed at the VAT increase. A number of licensees were still in the process of putting their prices up (on average by 10p per drink) and had yet to give thought to providing any new promotions.

Only two outlets in the area had any significant offers available – one being three branded shots for £5 and the other a double branded vodka or gin for £3 – and both were ongoing from last year.

The South West tells a similar story, with many respondents waiting to see how the VAT increase will be passed on by their pub companies before deciding if there is adequate margin to allow discounting. The overall feeling is that promotions will just not be worth doing this year.

In the more affluent – and less tourist dependent – South East, there is a general feeling that there are significantly fewer promotions right now than the same period in 2010. One high street circuit outlet stated that last year they offered "buy one, get one half price" on all bottled beers, whereas this year the same deal is only available on a single product.

Travelling north, licensees in the West Midlands reflect the feelings of many within the local on-trade. The general mood is one of disheartenment – with overheads increasing, and rising unemployment in the area squeezing spending further encouraging drinking at home on supermarket special offers.

The only significant promotions currently available are based on doubling-up spirits for an additional pound and some small-scale wine discounting in food led outlets.

Northern England reflects a similar story with many of the outlets polled only providing offers on "house doubles" and suggesting a dependence on wholesaler deals to create / drive promotions.
 
Finally, moving into Scotland, the blame has been squarely laid upon the government. Many of the licensees and managers polled felt that the increase in VAT and general costs were forcing them to put up prices just to survive.

A combination of a lack of consumer confidence, rising overheads, the VAT increase and the continuing influence of the health lobby (and related governmental policy) have put paid to the ubiquitous "BOGOF" deals of the past. Where offers are available they are almost entirely linked to food, usually through "meal and drink" deals, or small discounts on specific products or categories (often spirits).

Overall, it appears there is no doubt that the large scale promotions which were such an integral part of the business strategy for many on-trade premises in previous years have disappeared – in some cases possibly for ever.

Mark Newton, client relations manager, CGA Strategy, 22.02.2011