Olympics won't save tough 2012

20 January, 2012

The drinks trade is facing a tough 2012 as the country struggles economically – and even major sporting events aren’t expected to bring much of a sales uplift.

“The economy is going to be a key influence,” said Nielsen analyst Stewart Blunt. “There will be more unemployment and the caution that brings with it. From that point of view, shopping will become more guarded and considered in many cases, and we can expect to continue being quite price-sensitive in consequence.”

With inflation running high, this year’s planned duty hike could add 7% to the cost of drinks, he predicted.

Blunt’s comments came after what he called a “lacklustre” Christmas, in which wine, beer and cider sales remained virtually flat, spirits took a dip and only sparkling wine saw a big uplift, of 17%, according to Nielsen figures for the four weeks leading up to Christmas compared with the same period the year before.

Majestic chief executive Steve Lewis was similarly pessimistic, even though the retailer had a strong Christmas with like-for-like sales growing 4% in UK stores.

“The next 12 months will be just as tough as the last 12 months. I don’t see any light at the end of the tunnel at all,” he told OLN.

But Blunt noted that not everyone will be hit by economic difficulties, and if consumers sacrifice a big spend – such as a foreign holiday – they may have more to spend on alcohol.

Summer events such as the Queen’s Diamond Jubilee, the Olympics and Euro 2012 could bring seasonal uplifts, with local benefits to London and stadia around the country as tourists visit the games.

“With the Olympics I’m not quite sure it’s a mainstream drinking occasion as you would expect with football,” said Blunt. 

“But if you put the whole lot together it really shouldn’t be much worse than last year.”

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