'Supermarket prices encourage drinking at home'

Deep discounting by supermarkets is encouraging more people to drink at home, says a new report by consumer analysts Mintel.

It claims the in-home market has increased sales by 16 per cent since 2002 compared with only a marginal increase in the number of people drinking out of home.

In its report British Lifestyles 2007 it says pubs need to fight hard to combat the established trend towards home-drinking by offering consumers another reason to go out.

According to the report pubs: "need to stress the vitality and event theatre of the pub and its sociability as a contrast to in-home drinking." Despite rising interest rates and an uncertain housing market, consumers are spending more money on enjoying life with holidays and going out.

There is also an underlying trend for consumers to go up-market drinking more premium tipples, such as champagne and cocktails. Sales of wine and champagne (now worth over £10.2bn) have increased 26 per cent between 2002 and 2006, while sales of spirits and liqueurs - key ingredients for many a favourite cocktail - have increased 16 per cent over the same period, the report argues.

The report says that sales of ales and lagers remain an area of concern.

"Brewers and pubs need to put additional stress on those aspects of their draught beers that cannot be duplicated through the off-trade," it argues.

Mintel believes the imminent smoking ban will only have a limited impact on on-trade sales and should encourage new trade from women and families. Sales of wine, cider and soft drinks will increase while the most male orientated sector of beers and dark spirits are likely to see a drop.

Senior analyst at Mintel Neil Mason said: "Rising disposable income has lead to higher expectations about the quality of life, and as a result we are increasingly trading up and spending more on better quality, premium products and services."