Drinks sales up 3.8% but real-terms growth 'hard-won'

Analysis of figures from CGA by NIQ’s Daily Drinks Tracker, formerly known as the Drinks Recovery Tracker, showed average drinks sales by value in managed venues were up 3.8% overall between 22 April and 23 September this year.

Going back to April and May, the sector saw consumers celebrate a succession of bank holidays, Easter and the coronation of King Charles III, helping to boost sales despite cooler weather and rail strikes​.

Sporting events, including the Champions League and Women’s World Cup, also helped trade this summer.

Venues saw a 10-week stretch of year-on-year growth during April and June, before tailing off between July and August, attributed in part to unusually cool weather for the time of year.

Modest trading 

Despite a positive start to the month, sales dipped below 2022 levels by mid-July as the more wet weather set in, leading to the worst year-on-year comparisons for pubs at the beginning of August.

Regarding July's trade, CGA​ managing director UK & Ireland Jonathan Jones said: “After a long run of fine weather and sales it was a little surprise to see more modest trading.

“Eleven consecutive weeks of growth marked an impressive late spring and early summer for the on premise, especially given all the current cost pressures."

July also saw the sector grapple with changes to alcohol duty rates​ and the late-night levy​ while more than 170 pubs joined a legal claim against “secret commissions” paid to energy brokers.

Though the August bank holiday weekend helped pick trade back up, ending the month with modest growth, before returning to double-digit growth at the beginning of September.

“As we move towards the final quarter of the year, all operators will need to be at the top of their game to maintain footfall and achieve growth"

However, while venues had seen positive comparisons for five consecutive weeks as of Saturday 16 September, Jones explained real terms growth would be “hard won” against the backdrop of inflation.

On top of rising costs across the board for the sector, the headline rate of inflation​ stood at 6.7% in August this year, according to the Office for National Statistics (ONS).

The Bank of England also announced interest rates​ would rise by 0.25% to 5.25% in August, marking the 14th successive rates increase, in a bid to meet inflationary targets.

In addition, staffing issues​ caused problems for many pubs during the month’s bank holiday weekend​, on top of further rail strikes​, preventing greater sales.

Of the categories included in the tracker, cider performed best during this period, up by an average of 8.4% overall, followed by beer, which saw a 5.8% year-on-year upswing.

Challenges remain 

“Pubs with outdoor spaces always flourish in the sunshine, and the heatwave has been particularly good news for LAD brands", Jones said in June. 

However, additional figures from CGA​ also showed while beer sales had increased by value between August 2022 and August 2023, sales by volume had not risen at the same rate.

The data estimated the volume of beer sales per hectolitre in the on-trade saw a 0.6% increase during this time, while value saw a 5.3% upswing, from £12,529.5m to £13,199.8m.

Wine and spirits saw modest growth during the six months to September, up 4.4% and 1.4% respectively, while the spirits category was the hardest hit with a decline of 7.3%.

Speaking earlier this year, Jones said: “Operators continue to face strong headwinds, so whilst there is opportunity in the market, challenges remain.

“As we move towards the final quarter of the year, all operators will need to be at the top of their game to maintain footfall and achieve growth.”