How is the current macroeconomic climate affecting drinking habits? What do consumers think of supermarket drinks selections and why do they choose some shops over others? Drinks Retailing has partnered with research and insights specialist Ipsos to create a comprehensive picture of shopper habits and their perceptions of drinks categories in supermarkets
Our research shows that financial concerns related to inflation are having a significant impact on consumers’ mindsets. In October, half (51%) of alcohol or low/no purchasers surveyed told us they anticipated their financial situation to worsen over the next year,” says Freya Benson, associate director, market strategy & understanding at Ipsos. “We also saw high levels of concern around rising food and energy prices.
“The good news for drinks retailers is that almost threequarters (72%) of those anticipating a worsening financial situation said they would still maintain or increase their in-home alcohol consumption over the next 12 months. This indicates a level of resilience in the off-trade sector.”
Benson highlights: “Irrespective of whether they have financial concerns or not, more consumers claimed they had already cut back on alcohol consumption at home in the past year than planned to do so in the next year, suggesting the worst impact for the off-trade sector may have already come.” Over the next two pages, we’ll take a closer look at shopper habits, the context and what the future might hold.
So, what’s the context for all of this? Well, it’s no surprise that people are worried about both rising food prices and rising energy prices – 93% of those surveyed were very or fairly concerned about each. Beyond inflation, other societal issues that are worrying shoppers include climate change (78% very or fairly concerned) and reducing plastic packaging (74% very or fairly concerned).
Six in 10 (61%) of those surveyed claimed either their financial situation had worsened in the past three months or expected it would worsen in the next year. These consumers said they planned to use fewer utilities, cut back on luxuries (such as treats and alcohol) and start buying cheaper brands.
When it comes to alcohol consumption, those who expect their financial situation to get worse say they are likely to drink less, especially in the on-trade, than those who think their situation will get better or stay the same (42% anticipating a worsening financial situation will mean they drink less in the on-trade vs 29% expecting finances to improve and 22% expecting finances to stay the same).
Over four-in-five (84%) of UK adults surveyed had bought alcohol or low/no-alcohol alternatives from a supermarket in the three months prior to the survey.
BEER AND WINE PURCHASING IS ROUTINE BY NATURE. 70% of wine purchasers and 71% of beer purchasers buy as part of a planned routine/on a regular basis. Purchasing of beer and wine is most likely to occur in the same place they do their main grocery shopping (85% of beer purchasers and 84% of wine purchasers).
RTD PURCHASING, PERHAPS UNSURPRISINGLY, IS MORE IMPULSIVE. 50% of RTD purchasers were more likely to buy on impulse (vs only 29% of wine and 31% of beer purchasers). A third (34%) of RTD purchasers tend to buy RTDs from a separate shop to where they do their main grocery shop. Those buying RTDs are more likely to have purchased from a convenience store (51%) in the past three months than those buying beer (39%), wine (39%) and spirits (30%). Aldi is perceived to be improving the most as an alcohol retailer compared to a year ago, followed by Lidl and Tesco. Tesco has the highest likelihood of purchasing for alcohol (or low/no alternatives) in the next year, followed by Aldi and Sainsbury’s.
What are shoppers looking for?
When it comes to deciding which in-store retailer to buy from, the most important factors are convenience and price/promotions – with “I can do the rest of my shopping there” and “they offer the best value for money” mentioned as more important than any other factors presented. However, there are some different priorities* once we start to dig into the categories.
While key deciding factors of retailer choice for beer, cider and spirits include price, value and promotion, sparkling wine and Champagne, RTD and low/no purchasers are relatively more likely to mention good descriptions of products as being important.
Premium selections and food pairings are more likely to be important to Champagne and sparkling fans than buyers of other categories, while still wine shoppers relatively are more likely to consider good customer service and the convenience of a shop near work as being important. Low/no purchasers are the most environmentally conscious, with ethical retailing and minimal plastic use more likely to be mentioned as important in their retailer choice by this group than any other.
Meanwhile, RTD purchasers are comparatively more likely than other category purchasers to mention a selection of different sizes as being important – perhaps a tribute to the burgeoning sector that isn’t just about ‘gin in a tin’ anymore.
BEER & CIDER
Among their customers surveyed, Aldi and Lidl have the strongest* perceptions of offering the best prices, while Tesco shoppers have the strongest perception that their store is the place that offers preferred brands.
When deciding the in-store retailer for wine, aside from price, being close to home or work and good customer service are more important than other categories. Marks & Spencer scores highly on the customer service front among its shoppers surveyed, while wine shoppers at Aldi and Lidl recognise them as doing well on price.
In terms of sparkling wine and Champagne, Waitrose and M&S are both perceived strongest among their shoppers for stocking more premium products, while the Waitrose shoppers surveyed are particularly likely to cite that they offer the best quality and good service.
Compared to other categories, when deciding the in-store retailer for spirits more important factors are offering good promotions and discounts and the best value for money. Sainsbury’s, Tesco and Morrisons come out strongly on this among their spirits shoppers.
RTD purchasers are more likely than other category purchasers to look for retailers that offer products they are unable to find elsewhere, and M&S RTD shoppers give the strongest rating for their store delivering this.
Few distinguishing perceptions exist between retailers for low/no, but our Morrisons low/no shoppers surveyed have the highest perceptions of their store as having products they are unable to find elsewhere. Online shopping Over one-third (37%) of UK adults surveyed had purchased alcohol (or low/no alternatives) online in the three months prior to the survey.
Among online purchasers surveyed, offering the best prices and best value for money, and a website which is easy to navigate, are the top priorities when choosing an online retailer. Around half of online beer, cider, wine or sparkling wine/ Champagne buyers surveyed say they have purchased drinks from a supermarket website – and, among online purchasers, Tesco is the most preferred online supermarket retailer for both beer and wine.
Spirit buyers, however, were more likely to have purchased via mass-market websites, such as Amazon, than other category buyers. Online purchasing shows no marked increase or decrease over the past year. Compared to a year ago, 25% of those who have purchased online claim they are buying more alcoholic drinks online, while the same proportion claim to be buying less online.
59% of UK adults say they had not purchased any alcoholic or low/no drinks online in the three months prior to survey. Delivery charges are a barrier for a third (33%) of these, and a quarter (26%) perceive in-store has better promotions.
This report is based on research conducted by Ipsos for Drinks Retailing between October 17 and 24, 2022. Research was conducted via an online survey of 2,000 UK adults aged between 18 and 75 who said they purchased alcohol or low/no-alcoholic drinks in-store in the three months prior to completing the survey.
The sample, including those who were approached but did not qualify for the survey (did not purchase alcohol or low/no alternatives in-store in the past three months), were weighted to nationally representative UK proportions on age, gender, region, and social grade to ensure representivity of UK adults.
*Analytics were applied on the data to adjust for expected outcomes. It is typical big retailers will achieve high scores across measures due to greater familiarity. The analysis identifies what we’d expect a retailer to achieve based on its size, and measures whether it falls above or below this level. This enables us to identify distinguishing features relative to its size in the market.