Will liquor buying habits change as a result of NSW reopening? Retailers have seen huge growth in the past 18 months during the shift to at-home entertaining and will be keenly observing consumer behaviour over the coming weeks.
Jon O’Loughlin, Head of Client Development at consumer data business Fonto, is tipping sales in the off-premise will remain buoyant.
“We are predicting it will not be affected, as people are allowed friends and relatives into their homes once again, they will still purchase alcohol for in-home entertaining,” he said. “Our index consists of three elements – number of people buying, amount they spend and frequency of purchase. We expect any reduction in basket size will be countered by increased frequency of purchase – previously, consumers restricted how often they went to the store – as part of the lockdown effort – so spent more each time they went. Now, people will visit the stores more often but will spend less per visit, as they are no longer needing to keep visits to the stores to a minimum.”
The proportion of NSW consumers – as a percentage of the total population – buying alcohol off-premise has remained steady throughout 2021, confirming that people who buy on-premise, were also buying off-premise before lockdown.
However, Fonto has seen a 7-10% increase in the average basket size for off-premise purchases during lockdown. So, consumers appear to have replaced on-premise purchasing with off-premise activity.
“The main question we will be following is how quickly on-premise recovers,” O’Loughlin said. “End of lockdown will also allow events like Melbourne Cup to be celebrated on-premise. The question is whether we get to 80% vaccination rates by November 2, which will allow restaurants, bars and pubs to increase their patronage levels. That milestone also opens metro Sydney to regional travel, so we would expect to see further changes in consumption patterns.”
Online liquor shopping continues to be a growing trend, but has faced obstacles in the delivery process.
“COVID-19 has permanently changed the way we shop,” O’Loughlin said. “Alcohol is no different, and we expect this to accelerate in the category in the future. Consumers tell us they like to take their time to consider more options when buying alcohol online. If the online ordering process is made really easy and click and collect is seamless, customers will keep coming back.”
O’Loughlin noted that as the bottleshops have been allowed to stay open, there has been no enforced requirement for consumers to switch to online.
“Most of the online shopping has been via click and collect rather than delivery,” he said. “We have an unproven hypothesis that people were put off ordering deliveries as the delays in general parcel deliveries put them off. Click and collect is easier and more suited to personal preference.”
Fonto provides free data to help on-premise get back on its feet
Fonto is offering free access to its weekly transactional data, covering both on-premise and off-premise categories, for the next four weeks to help the drinks industry get immediate insights around on- and off-premise activity during the NSW reopening.
“We know people will have lots of questions about on-premise activity – who is venturing out, where are they spending, how much are they spending etc – and whether it will have an impact on off-premise purchasing,” O’Loughlin said.
Fonto will provide weekly transactional data updates from October 21 to November 10 and is also offering discounted survey packages between now and the end of November.
Contact Jon O’Loughlin at firstname.lastname@example.org