Wine sales flatline as spending cools

14 November, 2008

Off-trade wine sales have gone flat as cash-strapped consumers give up their entry-level bottles of wine in the face of rising household and fuel costs, according to Nielsen.

Overall off-trade wine volumes were completely flat in the year to Nov 1 – but the under-£3 category has lost 4.5 million cases.

Nielsen analyst Stewart Blunt told OLN: “A lot of people will only buy the cheapest wines, and their discretionary spending is now on the gas bill, petrol and all the things that have gone up. Therefore they have had to forego buying their wine.

“You can create a picture in your mind of a granny who used to enjoy a bottle of cheap wine a week and now she daren’t.”

He added that bottom end wine sales have pulled back slightly in the past few weeks as supermarkets have brought in more deep-discount offers.

Wines priced over £5 are still growing at 20% by volume, and slightly more by value. Blunt said higher income consumers drinking these more expensive wines are less affected by the recent price hikes, and noted the ongoing shift from the on-trade to the off-trade as consumers at all levels rein in their spending.

He said Christmas sales could go either way: “People will have had nine months of abstinence and saving – they might think, damn it, we will have a proper Christmas, so you get a good bounce back. On the other hand the austerity may pervade.”

Blunt said the figures might provide evidence against government plans to introduce minimum pricing on drinks.

He said: “People are actually demonstrating responsibility because they are not buying alcohol as much as they used to, and you are going to make it even harder for them.

“Isn’t that anti-social?”

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