Inflation holds sales down in real terms

25-Oct-2022 - Last updated on 25-Oct-2022 at 08:56 GMT

Tumultuous time: average drinks sales ahead of last year but rising inflation leaves them down in real terms (Credit: Getty/Klaus Vedfelt)

Related tags Finance Drinks Cga

Drink sales in Britain’s on-trade have exceeded last year’s levels for the fourth week in a row but remained down in real terms due to rising inflation, the latest Drinks Recovery Tracker from CGA by NielsenIQ has revealed.

In the seven days to Saturday 15 October average drinks sales in managed venues were 5% ahead compared with the same week in 2021 and up 4% on the equivalent period in 2019.

Every day last week delivered sales above 2021 levels, with a busy round of football fixtures having helped bring people into pubs and bars.

CGA managing director UK and Ireland Johnathan Jones said: “It’s a tumultuous time for the UK economy and politics, but it’s very encouraging to see people are still so keen to drink out in pubs, bars, and restaurants.”

Cliffs edge

Year-on-year growth peaked at 12% on Sunday 9 October but was much lower on Friday and Saturday (14 and 15 October) at 0.3% and 1% respectively.

Additionally, sales were still down in real terms due to rising inflation with many hospitality businesses facing a “cliffs edge”.

This comes as the Office for National Statistics (ONS) last week reported inflation had increased 10.1% in the 12 months to September this year, with food costs having made one of the largest upward contributions.

Furthermore, like-for-like sales in the nation’s top managed pub, bar and restaurant groups were 3.0% behind September 2021 levels, the latest edition of the Coffer CGA Business Tracker recently revealed.

Sustained enthusiasm

However, four weeks of growth should raise hopes for decent trading in the run-up to Christmas, according to CGA, with the previous tracker having shown sales in managed venues were 3% ahead vs last year in the seven days to Saturday 8 October.

Category wise sales of beer and cider saw double-digit growth for a third week in a row, with sales up 13% and 14% respectively, soft drinks (up 6%) and wine (up 5%) also saw year-on-year growth while spirits sales declined by 10%.

Jones added: “The squeeze on consumers’ discretionary spending continues to tighten, but they will hopefully sustain their enthusiasm as we move towards the first normal Christmas for three years.

“The football World Cup also gives us confidence the beer and cider categories can continue their strong recent performance.”