UK – UK beverage alcohol consumers have become more confident that they can pay their bills compared with September last year, IWSR’s latest consumer data reveals, pointing out ways in which they are responding to the impact of rising inflation.

The latest consumer data (based on consumer surveys conducted in February 2023) also shows that UK drinkers are happier than they were in the Autumn of 2022.

 While consumer sentiment has improved, beverage alcohol consumers in the UK are still mindful of how they spend their disposable income.

While consumer sentiment has improved from the lows of 2022, beverage alcohol consumers in the UK are still mindful of how they spend their disposable income, and many say that alcohol spending is one of the first to be cut,” said Richard Halstead, COO Consumer Insights, IWSR Drinks Market Analysis.

“To balance rising costs, UK alcohol consumers are adapting their lifestyle habits; going out is treated as a more occasional luxury, while the at-home occasion offers opportunities to socialize on a more regular basis.”

Although the overall picture remains negative, the percentage of those that believe they will be worse off in a year has halved since last year, as has the number of people who are worried about the year ahead.

In responding to the impact of rising inflation, consumers are preserving the occasions that matter more than they did in 2022. The percentage of people saying that they “won’t drink alcohol in bars and restaurants at all” has fallen by three percentage points between 2022 and 2023.

Just under a third (30%) of all UK alcohol drinkers expect to use the sector less or not at all; current on-premises usage is a net negative.

Consumers are allocating shrinking disposable income to essentials due to anxieties over personal finances, which is especially strong amongst millennials, which is driving consumers to cut back on alcohol ahead of expenditure on other household categories.

A third of UK alcohol drinkers would rather treat themselves to a better-quality drink at home than go out.

The shifts in consumer behavior continue to shape the channel share of the UK total beverage alcohol market.

E-commerce has adapted quickly to meet the dramatic increase in consumer demand, with sales remaining considerably higher than in 2019. However, the channel has since seen some market corrections.

As the on-premise recovers, sales in the off-trade are normalizing, many large retailers have been successful at holding onto the increased footfall, and it is unlikely that the on-premise will reach 2019 levels again that held almost 40% channel share of the UK market.

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