“Pretty decent Christmas” for licensed trade
There’s broad consensus in the licensed trade that this Christmas has been a very good one.
17 January 2017 | 0
“The indications are that a decent single figure (6-8%) increase was achieved across the Dublin trade” LVA Chief Executive Donall O’Keeffe told Drinks Industry Ireland, “with the city centre perhaps being a bit stronger again. The way Christmas fell meant that town had an exceptional week up to and including Friday 23rd.”
He’d spoken to a couple of suppliers who’d described having had a very good December with the city centre enjoying a strong run up to Christmas and the suburbs having a good run between Christmas and early January.
“2015 was a really strong Christmas and 2016 was too,” he said, with feedback from individual members remaining pretty positive.
Outside Dublin, VFI Chief Executive Padraig Cribben revealed, “Our contacts with members around the country would suggest that Christmas trading was, by and large, very positive.
“The way Christmas fell it was more concentrated than in other recent years but the spend was good and there was a better air of positivity around.
“All in all a good end to a year that has shown some growth in the on-trade.”
And Limerick Councillor and publican Gerry O’Dea was quoted in The Limerick Leader as saying, “This Christmas there certainly was a better feeling around and pubs and restaurants would be a great barometer of that because people have a bit of extra money”.
Suppliers, too, seem to have had a good December.
Dalcassian Wine & Spirits recorded a 20% growth in turnover through the Christmas period with “unprecedented” sales rises of 25% in super-premium and premium wine and spirit brands.
However according to Dalcassian’s Managing Director John Dillon, the wider alcohol market remained unchanged.
“Irish consumers are trading up across the board, but showing no significant increase in total spend,” he said, “Quality, craft and premium are the big winners but people are drinking much less. Despite continued economic recovery, consumer behaviour still bears echoes of the recession. It’s as though we still haven’t lost the fear of 2008.”
As far as Dalcassian is concerned, the new raft of high-end, small-batch craft gins from Irish distilleries coming onto the market, together with the increased availability of premium international gins, was instrumental to Christmas growth.
Wine sales reflected similar trends – consumers are trading up but drinking less, he reported. Champagne is still holding its own and Prosecco continues to make significant market gains.
John added that while last year’s gin sales were less than 25% of vodka sales in bars and restaurants, now some bars are reporting gin equalling vodka sales.
“This is particularly remarkable as this growth is from a very small base,” he stated, “The younger Millenial generation is driving this growth.”
A marked rise in corporate sales was instrumental to the growth in premium brand turnover this Christmas and John says that restaurants have enjoyed a busy festive season.
“It appears companies are starting to spend on entertainment and gifting again and the on-trade has noticed the return of the company Christmas party,” he stated, “But it no longer embodies the excesses of boom times.
“Again we see a trend towards trading-up and ordering by premium brand. But the shot culture has dwindled and the volume of alcohol consumption is flat if not marginally down.”
Growth in overall consumer spend has continued to slow according to the latest data from Visa’s Irish Consumer Spending Index.
This month’s data show that consumer spending was up 3.6% year-on-year in December, marginally slower than the 3.9% rise in the previous month as the rate of expansion slowed for the third month in a row.
Indeed December’s increase is the weakest registered since the Consumer Spending Index began in September 2014. Spending has increased continuously through the 28-month series so far, but the latest rise was the slowest since it began in September 2014.
While the overall rate of consumer spending has continued to slow, December was nevertheless a positive month.
The Hotels, Restaurants & Bars sector saw the rate of expansion quicken to a three-month high of 5.8% up year-on-year, with a spike in entertainment over the festive period. Food & Drink also posted a return to growth of spending (up 2.9% year-on-year) in December following a decline in November, benefiting from increased trade for groceries for Christmas meals.