Expect Some On-Premise Relief in 2010 – Wine & Spirits Daily Reports
With 2009 almost over, people are wondering if 2010 will prove better or worse for the alcohol beverage industry. Consulting firm Technomic doesn’t expect to see growth in alcohol sales at the on-premise until 2011, although they believe 2010 will be a little improved. Technomic vp and director of its on-premise practice, David Henkes, acknowledges that “while next year won’t be quite as bad, we don’t think we’ll begin to see real growth in consumer spending on alcohol again until 2011.”
Technomic projects that alcohol sales at the on-premise will decline -2.5% in 2010 “based on expectations of continued contraction in the restaurant and bar industry,” the firm said in a statement. This is a rather large improvement from 2009: Technomic estimates that alcohol sales will end the year down -4.9%.
ON-PREMISE EXPECTATIONS IN 2010
Wine is expected to take the biggest hit next year, with sales projected to decline -6.7%. Spirits are expected to drop -2.1% and beer is forecasted to decrease -1.8%.
The biggest declines will be seen in casual full-service restaurants and high-end white tablecloth restaurants, while bars and nightclubs will show the most growth. Alcohol sales at fine dining establishments are expected to drop -10.4%; casual dining -6.8%; bars/nightclubs +0.6%; lodging -6.1%; casinos -5%; concessions -2%; and other recreation -4.2%.
Technomic bases their outlook for alcohol sales on “continued weakness in restaurant traffic and further consumer frugality,” said David, while noting that “the overall share of visits that include alcohol has been on a downward slide for several quarters.”
This drop in sales is further supported by current data from the Technomic/GuestMetrics partnership which shows check averages are down -6% through the third quarter of 2009. On top of declining traffic, overall alcohol sales levels have fallen at a much steeper rate than the decline in food.
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