Alcohol spending showing cost crunch immunity

By Neil Merrett

- Last updated on GMT

Related tags: Alcoholic beverages, Alcoholic beverage

US consumer spending on alcoholic beverages is proving
resilient to the current economic downturn, at least
at retail level, suggests new findings.

While global economic concerns over food and fuel costs are causing market uncertainty for many manufacturers, the drink purchasing behaviour of consumers at off-trade outlets has only been mildly impacted, says analyst the Nielsen Company. Affordable Luxury ​ Group analyst Danny Brager said that although consumers were generally having to tighten their spending amidst higher prices for many products and services, drink makers were proving to be unaffected by the changing market. "Alcoholic beverages are withstanding the economic slowdown very well, compared to other categories that might be considered indulgent or non-necessities,"​ he stated. "To many consumers, alcoholic beverages are an affordable luxury."​ The survey, which interviewed 3,500 US consumers who had purchased alcoholic beverages from stores within three months of being interviewed, was conducted in May 2008. In its findings, the Nielsen Company said that 80 per of surveyed consumers were continuing to spend at least the same amount of money on alcoholic purchases compared to the previous year. Just under 50 per cent of the total survey group said that the economy was having no influence at all on how they were buying beer, wine or spirits products at retail stores. At home preference ​ Not all drinks channels are set to profit from this trend though, with the report highlighting some concerns for brand performance at bars, clubs and other on-trade locations. "Purchases at out-of-home or on-premise locations may be more susceptible to a negative economy as consumers eat out less and entertain at home more often,"​ stated Brager. "Off-premise sales in grocery, mass merchandise, convenience, liquor and other stores will likely see benefits of this activity."

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