BWS returns to growth over Christmas period

21 January, 2014

Smirnoff was the star performer

Drinks retailers enjoyed a relatively strong Christmas trading period as BWS volume sales grew by the slightest of margins.

In the 12 weeks to January 4, 2014, total liquor sales were up 0.1% on the previous year.

A year ago we reported that the off-trade had suffered a dismal Christmas, with volume sales down 6.1%, so to arrest that decline and return to growth marks a distinct improvement in fortunes.

Nielsen analyst Helen Stares said the Christmas growth is even more impressive when you consider that BWS volumes have been falling for the rest of the year.  

Value sales grew by 3.6% over the festive period, and Stares attributed this to higher duty rates on a number of categories, rising prices, and the move towards more premium products.

The convenience sector was the star performer: supermarkets accounted for 50.3% of sales, but their growth of 2.9% was far outstripped by convenience stores, which had a 28.4% value share of BWS and grew by 5.8%.

Stares said the growth in the convenience channel was sparked by the increasing number and popularity of the grocers’ small-store formats.

She added: “With Christmas Day on a Wednesday in 2013, many shoppers delayed their purchasing until the Sunday and Monday immediately before Christmas. However, there was an uplift compared with the previous year’s sales in early November as retailers started off their promotions with deep deals.”

The proportion of total liquor sold on promotion rose slightly to 57%, but the average promoted price per litre also increased by 3.8% as retailers shunned many half-price deals in favour of less extreme discounts.

Spirits grew the most in value – up £56.3 million on the previous year – but volume sales were flat, reflecting a trend towards premiumisation.

This is further illustrated by Nielsen’s revelation that the average price on a litre of spirits rose by £1 to £19.

Stares said: “The biggest week for spirits sales over Christmas 2013 was the week ending December 21, with sales of over £158m in that one week.

“Sales in the following week were also high at £139m, indicating that many shoppers chose to purchase their Christmas drinks in the final couple of days before Christmas.”

The top-selling brand was Smirnoff Red, which was worth £115.3 million to the off-trade over the 12 weeks, comfortably ahead of The Famous Grouse in second place on £78.4 million, and then Jack Daniels, Baileys and Gordon’s.

Still wine slipped 3.6% in volume, but there were some standout winners. South Africa grew by £20 million on the previous year, and Nielsen said the currency exchange rate had worked in its favour.

Spain, last year’s star performer, dropped £11 million.

Sparkling wine remains the only major BWS category other than cider to show both value and volume growth.

Value grew by 14.8% with volume up 5.5%. Nearly 70% of sparkling wine was sold on promotion, but this did not result in a fall in prices, with the average promoted price showing an increase of 12%. The average price of a bottle of sparkling wine over Christmas 2013 was £6.64, up by 54p on Christmas 2012.

In Champagne, value sales rose 3.2%, putting it behind total BWS performance, and volume sales fell 1.1%, an improvement in the performance over the rest of 2013. Champagne remains the key product to be promoted over this period, with 71% of sales volume on deal.

Meanwhile beer grew 1% in volume, cider was up 7.4% and RTDs dropped 8.7%.

Stares said: “In beer, ales continued to perform well, up 4.6% in value, driven by sales of premium, whereas for lager premium products drove the category as standard lager declined by 1.1%.

“Also of note is that lighter lagers [between 1.2% abv and 2.8% abv] showed a strong uplift, growing 32.9%, with NABLAB lagers [up to 1.1% abv] also growing at 4.9%.”

Cider sales were boosted by flavoured cider, which was up 56.4% but apple fell by 1.5% and pear was down 26.5%.

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