Hospitality sector sees €54m sales boost in early 2024

CGA research shows that drink sales by volume in Q1 of 2024 remain 8.6% below pre-COVID levels

Seventy-seven percent of Ireland’s consumers agree that eating and drinking out is the treat they most look forward to (Photo by Andrea Piacquadio via Pexels)

Sales in the Republic of Ireland’s hospitality sector were €54 million higher in the first three months of 2024 than in the same period last year, according to research from CGA by NIQ, and while outlet numbers in the Republic fell by 2.4% after closures, rate of sale (ROS) increased by 2.4%.

Sales were particularly strong in March, due to key events including St Patrick’s Day, Easter, Mother’s Day and the end of the Six Nations rugby tournament, which was won by Ireland.

However, drinks sales by volume were fractionally down year-on-year, and growth was instead powered by an average uplift in prices of 9.7%. Volumes have not yet returned to pre-COVID levels, with totals in the first quarter of 2024 8.6% lower than in the first three months of 2019.

Spending continues to be compromised by the cost-of-living crisis, the report shows, with two-thirds (65%) of consumers saying they are moderately or severely affected by rising costs, though March showed that the large majority remain eager to visit pubs, bars and restaurants. Three quarters (77%) of Ireland’s consumers agree that eating and drinking out is the treat they most look forward to.

Pressure on spending is leading to some important changes in drinking preferences—including a focus on quality over quantity. A third (34%) of consumers are willing to buy fewer drinks, but only half as many (18%) are prepared to reduce the quality of their drinks.

With longer serves often perceived as better value for money, some Irish consumers are turning to long alcoholic drinks. The LAD category increased its share of total drinks sales by 1.6 percentage points in the quarter to end-March—driven by stout and cider in particular—while soft drinks gained 0.3 percentage points. Growth came at the expense of spirits categories, which lost 1.9 percentage points of drinks share, with gin recording the highest losses. Nearly a third (31%) of consumers told CGA they are drinking fewer spirits, while just 6% are drinking more.

Pubs have been ROI’s biggest winners in the first quarter of 2024. Their share of drinks sales increased by +0.9 percentage points in the year to end-March—thanks in large part to family-focused occasions and sports screenings—while restaurants lost -0.5 percentage points. Rural regions of Ireland meanwhile slightly outperformed Dublin, as increased costs led some consumers to move away from city centres for eating and drinking. 

Sian Brennan, client director, Ireland, CGA, said: “Despite a slow start to the year because of increased participation in Dry January, it’s been a bright first quarter for Ireland’s pubs, bars and suppliers. Consumers are as keen as ever to eat and drink out—especially on special occasions when memories are made. However, it’s important to note that much of the sales growth has been powered by inflation, and that spending remains tight for many people. All venues and suppliers will need to stay laser-focused on delivering both high-quality and good-value experiences and respond nimbly to people’s changing needs and preferences.”

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