Survey shows price crucial to cash-strapped shoppers
Published:  13 June, 2008

Advertising fails to get through to consumers hooked on bogof deals and promotional discounts

Almost two-thirds of off-trade consumers say that price is the most important factor when buying alcohol - up from 51% to 63% over the past year, according to a new report from Deloitte.

Only 36% said brand was more important than cost when buying beer, down from 57% a year ago. And just 1% said they were influenced by advertising - down from 5%.

Tim Wilson, director of Deloitte's consumer business practice, said: "This is a significant shift from the past two years when more than half of consumers said that brand was more important than price.

"The continuous diet of money-off promotions and two-for or three-for deals is starting to have an effect on the minds of the consumer, together with a tightening of the purse strings as household costs start to rise."

In the wine trade there are reports of a consumer drift towards the discounters, and Asda's three-for-£10 mechanic is said to be attracting AB customers and giving the retailer the sector's most impressive growth - something Asda was not able to confirm this week.

One supplier told OLN: "None of us like it - you think you've agreed a promotional margin and then they announce they're putting your brand in three-for-£10.

"But it's a very simple offer for ­consumers to understand and it is ­growing Asda's market share."

Waitrose, meanwhile, said average prices were up from £5.90 pre-Budget to £6.05 now. Head of wine buying Justin Howard-Sneyd MW said : " Sales are growing faster than volume, and the decent performance of sales versus last year is masking a volume slowdown."

He said there were no plans to reduce facings of premium wines, but added: "We are looking at ways to highlight the everyday great value of some of our more affordable wines. We are also looking at what the Budget and exchange rate have done to our range architecture

and making sure that we have the right number of wines at key price points."

Deloitte's Wilson added that brewers would have to be nimble in their response to rising costs of malted barley and hops, and aluminium and glass packaging.

He said: "Retailers want to maintain specific price points for their customers on cases of beer, which means that brewers will need to look at smaller bottles and cans or pack configuration to try to maintain their margins."

The survey also found that 19% of ­people were visiting pubs less frequently than they thought they would do following the introduction of the on-trade smoking ban.

Wilson said: "The beer market is declining, especially in the on-trade.

"With none of the Home Nations qualifying for Euro 2008, they will have to cope without one of the major summer high points for the industry."

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