The economic downturn is hitting drinking at home and in pubs, with suds sales down more than 8% in the first quarter—the biggest decline since 1997
Sales of beer in supermarkets and off-licences in the first quarter fell at their fastest rate since the recession of the early 1990s and were nearly double the rate of decline in pubs, as consumers cut back on supping their favourite tipple in their living-rooms.
The British Beer & Pub Association said that off-trade beer sales tumbled by 11 per cent in the first quarter of 2009. A BBPA spokesman said: "It is the biggest quarterly decline [in off-trade] sales since the last recession." It was also the first time since 2005 that the first-quarter sales in supermarkets and off-licences have been lower than the previous year, and the third consecutive quarter of falling sales.
The off-trade slump contributed to an 8.2 per cent decline in total beer sales – the highest decline in overall beer sales since 1997. On-trade sales in bars, restaurants and clubs also fell by 6.3 per cent – equal to 753,000 fewer pints every day – over the first three months of 2009. Overall, British consumers drank 1.7 million fewer pints every day than in the same period in 2008, the BBPA said.
The decline in beer sales will raise eyebrows at the Treasury, which last week increased alcohol excise duty by 2 per cent in the Budget – equal to 1p on a pint – following an 18 per cent tax hike in 2008. David Long, the BBPA's chief executive, said: "With the Budget last week, government tax policy continues to make this situation worse." The BBPA said that tax alcohol income from duty fell by £17m in January and February, despite the 18 per cent tax increase over the period.
Paul Hickman, the analyst at KBC Peel Hunt, suggested that the sunny weather in March, compared with the same month in 2008, could have contributed to the larger fall in off-trade sales compared with on-trade. He added that listed pub companies that have reported this year have posted flat or improved recent sales, but said "there is no hint that things are getting easier". Some of the UK's biggest supermarkets said that sales of beer were significantly up this year, suggesting it is off-licences that are feeling the pain in the off-trade market.
According to Nielsen, the market research company, off-trade sales of beer fell by 2 per cent over the year to 21 February 2009, while on-trade sales fell by 5 per cent.