Rail strikes and inflation hamper growth of drinks sales in early 2023
On premise sales are still well below pre-Covid levels despite year-on-year growth in the first week of January, as inflationary pressures and rail strikes hinder the on trade, data from CGA by NielsenIQ’s Drinks Recovery Tracker shows.
Average sales in the week to Saturday (7 January) were 24% above the equivalent week in 2022, showing significant year-on-year growth. However, trading was disrupted last year due to concerns about the Omicron variant of Covid, which were not reflected in 2023 results.
Drinks sales finished 2% ahead of the same week in 2020, when venues were trading as normal. But adjustments for inflation reveal that trading is substantially behind in 2023.
Rail strikes have impacted visits to the on trade, with sales down 17% and 13% on 2020 levels on Friday and Saturday respectively, when journeys into cities and towns were severely obstructed.
The first week of January was good for soft drinks sales with Dry January underway; results show they were 38% and 13% ahead of the same seven days in 2022 and 2020.
However, wine sales were down 10% compared to 2020, while spirits (up 9%), cider (up 7%) and beer (down 1%) had a solid week.
Jonathan Jones, CGA’s managing director for the UK and Ireland, described year-on-year sales growth as “relatively easy against Covid-hit comparatives”, but said it was still a pleasing start to 2023.
“Comparisons with pre-COVID-19 patterns are less positive,” he said, “and we are seeing the results of pressure on consumers’ spending, especially in the aftermath of Christmas. Rail strikes are also curtailing trade, and operators will be hoping for relief on these and the many cost challenges in the weeks ahead.”
Energy bills for the hospitality industry are also predicted to rise by £4.5 billion, as support for businesses will be cut from April onwards.