Survey: Alcohol is Affordable Indulgence for Holidays

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Survey: Alcohol is Affordable Indulgence for Holidays

SCHAUMBURG, Ill. – Despite economic concerns, consumers are still willing to spend on alcohol beverages, as they view them as an affordable indulgence for the holiday season, according to the latest survey results from The Nielsen Co., parent company to Convenience Store News.

"Historical as well as more recent consumer trends indicate alcohol beverages are much more recession-resistant than many other product categories," Richard Hurst, senior vice president, Beverage Alcohol for Nielsen, said in a statement. "[Consumers] are reluctant to cut back significantly on beer, wine and spirits, especially for at home consumption and entertaining. With the prospect of limited economic recovery in 2009, consumers are likely to consider alcoholic beverages as an affordable indulgence during the holiday season."

As consumers increasingly stay home and entertain there, on-premise retailers—restaurants, bars and nightclubs—are posed with a challenge. Two-thirds (66 percent) of fine dining patrons said they are going out less often compared to a year ago, while the same statement resonated with 65 percent of nightclub patrons, 55 percent of bar patrons, 59 percent of casino and resort patrons, and 52 percent of casual dining visitors, according to Nielsen data.

This challenge provides opportunities for retailers who use the one-stop shop angle to their advantage.

"Many stores are adding alcoholic beverages to their assortment, providing more opportunities for consumers to purchase alcoholic beverages at competitive prices," Hurst said. "Given that fewer consumers are likely to be able to afford luxury wines and spirits in their holiday budgets—and there is evidence of trading down—stores would do well to ensure that they offer products across a variety of price segments."

Convenience stores can leverage domestic brews to their advantage this holiday season. Poor exchange rates caused price increases in import categories, making them less competitive as domestic alcohol beverages. In addition, imported beers have shown steady declines in the last six months, while craft beers have been gaining share, according to the report.

"In tough economic times, consumers are often biased toward national or local products, further enhancing the prospects for domestic brand growth, whose prices have remained relatively stable through the year," Hurst said.

Further, off-premise retailers can join in the holiday spirit with alcohol beverage gifts. Nielsen expects a rise in the purchase of alcohol beverage as gifts this year, helped by a selection of special "value-added" packs.

"Alcoholic beverages as gifts, especially those with value-added packaging, can fit most holiday shopping budgets and represent a more economical alternative to bigger ticket items," Hurst said. "Retailers should consider multiple store display locations to capitalize on impulse purchasing, as well as providing gift accessories nearby, such as bottle openers, gift bags, mixed drink party pack ingredients and glassware."