UK: UK wine off-trade improves, on-trade struggles - research
Confidence is slowly returning to the off-trade wine market in the UK, according to recent research.
Wine Intelligence has been monitoring consumer confidence in the UK wine market since late 2008 as part of its regular Vinitrac survey of 1,000 regular wine drinkers.
Having added two questions to its survey - "how has your spending on wine changed in the past three months?" and "how has your frequency of consumption changed in the past three months?" - the research company has asked these questions on three occasions, for both on and off-trade behaviour.
Analysts at the London-based research organisation have combined the responses to create a Confidence Index. An index of 50 indicates static consumer spending. An index figure above this means a net increase in spending. The off-trade Confidence Index stood at 37 in December, falling to 36 in February and rising to 40 in June.
"Although the sector is still in negative territory, some confidence is clearly returning, despite the price increases that the take-home market has experienced as a result of the April duty rise," said Wine Intelligence.
The UK's on-trade, however, continues to struggle. The on-trade Confidence Index shows only a minuscule increase - from 13 to 16 - between February and June. "With the UK economy still in trouble, and the on-trade facing continued cost pressures, this part of the market looks likely to struggle for the remainder of 2009 and perhaps beyond," the company said.
Lulie Halstead, chief executive of Wine Intelligence, said: "The state of play in the wine market is often distorted and disguised by things like duty increases, which can exaggerate sales growth, or volume increases which outpace the category?s financial performance.
"The Confidence Index cuts through this by communicating directly with consumers - not just those who spend huge amounts on wine, but those who perhaps only drink a few times a month.
"The trade can draw some positives from the modest increase in confidence in the off-trade, where 64% of sales value and 86% of volumes are achieved. But we as an industry clearly have a lot of hard work ahead of us to get consumers spending more on wine and drinking it more regularly."
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