Here are just seven of his top takeaways for suppliers.
1 Costs impacting leaders’ confidence
CGA’s latest Business Confidence Survey shows 57% of leaders currently feel confident about their business over the next 12 months. This is down by five percentage points from October 2023, but is ten percentage points higher than at the start of 2023. The dip in confidence over the last quarter reflects the financial challenges facing hospitality, with concerns about costs in many areas—especially labour. Survey respondents say they have raised pay by an average of 10% over the last 12 months, and more increases will come when the National Living Wage rises in April. Food price inflation—which remains in double-digits—is meanwhile forcing venues to raise menu prices, though more than half (58%) of leaders have not passed on all their cost increases to guests.
2 Visit frequency under pressure…
CGA’s Consumer Pulse research highlights the ongoing effects of the cost-of-living crisis on consumers’ spending. Over a third (38%) of consumers say they are making fewer visits to pubs, bars and restaurants than they usually do—significantly higher than the 26% who are going out more often.
3 … But underlying demand remains strong
However, the core On Premise consumer group that accounts for the vast majority of visits remains as engaged as ever. Two in five (41%) of those who go out at least weekly say they are making more trips into trade than they typically do. Even when money is tight, people remain keen to go out when they can, and are prioritising the On Premise over many other areas of discretionary spending. One consequence of this is that some consumers are saving their visits for special occasions and big events like Christmas, and bank holidays and Halloween—all of which have delivered significant trading uplifts.
4 Drinks sales down by volume, flat by value
CGA’s On Premise Measurement service indicates a 5% year-on-year drop in total drinks serves in the On Premise, and a 3% fall in distribution. Despite this, total value sales are level year-on-year, and average RoS has marginally increased by 1%.
5 Beer taking share from spirits
The spirits category gained significant extra share of the drinks sales mix when the On Premise reopened after COVID lockdowns, but those increases have now been reversed. Spirits lost 1.5 percentage points of share in 2023—largely at the expense of beer, which gained 1.3 percentage points. Cider and soft drinks took a little extra share too. The shift from spirits towards beer also reflects the cost-of-living crisis, which has led some consumers to seek better value in longer serves, as well as a shift away from high tempo occasions and towards earlier dayparts.
6 World lager, stout and no/low gain ground in LAD
Recent winners within the Long Alcoholic Drinks (LAD) category include World Lager and Stout, which grew their share of volumes by 2.6 and 1.2 percentage points respectively in 2023. Losers include Standard Lager and Premium Lager, which lost 1.4 and 1.1 percentage points—a sign that many drinkers are seeking to trade up. Draught World Lager is now stocked in 69.1% of outlets—more than any other Lager style—and Stout has grown in prominence because of its focus on quality and close association with sporting occasions. Meanwhile, strong interest in Dry January points to the growing popularity of no and low alcohol alternatives to beer. While no and low brands only attract 0.8% of total beer sales, this is now a £111m-a-year segment—and December was its best ever month in the history of CGA’s OPM service.
7 Cocktails and premium the bright spots in spirits
Although the spirits category has struggled, some segments are more resilient than others. Spirits to be savoured have outperformed shots, with Rum and Whisky among those gaining the most share. The Cocktail category is also growing, and lifted its share of spirits by 0.5 percentage points in 2023. Trade-ups are another positive, and the premium and super-premium categories grew their share of spirits by 1.4 and 0.2 percentage points respectively year-on-year—while standard brands lost 1.6 percentage points.
CGA’s unique combination of sales measurement, consumer research and leader-level sentiment provides powerful insights into On Premise trends. It delivers expert analysis of performance by channel, category, occasion and much more, helping suppliers craft winning strategies that engage consumers and gain share. To learn more about the best-in-class suite of solutions, please contact Jonny Jones at jonathan.jones@nielseniq.com.
