On-premise beer (and wine and spirits) sales off to ugly start in Q3, says GuestMetrics

guest metrics llc logoPress Release:

(Leesburg, VA) – According to GuestMetrics, food & beverage sales at table service restaurants and bars through mid-August 2013 continue to be very soft, and unless there is an improvement in the coming weeks, 3Q13 risks being the weakest quarter of the year for on-premise.

“Our data indicates that across the board during the 4-week period ending August 11th, trends for full service restaurants and bars were very weak,” said Bill Pecoriello, CEO of GuestMetrics LLC. “On-premise alcohol volumes were -2.9% during 1Q13, recovered somewhat to -1.6% in 2Q13, but during the first half of 3Q13, have decelerated to -3.5%, which is not an encouraging sign. In terms of the specific alcohol categories, beer volumes were -4.3% in 1Q13, improved to -2.1% in 2Q13, and thus far in the quarter, have deteriorated to -4.6%. Spirits volumes were -2.4% in 1Q13, saw a slight improvement to -1.7% in 2Q13, and weakened to -3.0% in 3Q13 to-date. Wine volumes started off the year on a strong note at +0.7% in 1Q13, softened slightly to +0.5% in 2Q13, and have now dipped into negative year-over-year territory at -1.3%, likely due to the recent weakness we’ve been seeing among fine dining restaurants.”

“To get a better sense for what is causing the weakening trends in alcohol, we also looked at traffic trends within on-premise,” said Brian Barrett, President of GuestMetrics. “Overall traffic to full service restaurants and bars started out the year at -1.4% in 1Q13, improved slightly to -1.2% in 2Q13, and thus far in 3Q13, has deteriorated to -1.9%. Furthermore, all three segments within on-premise have decelerated during July and the first part of August relative to where they were during 2Q13. Traffic to casual restaurants has been weak in a relatively consistent manner throughout the year, going from -2.3% in 1Q13 to -1.6% in 2Q13, and -2.1% in 3Q13 to-date. Traffic to bars and nightclubs has gone from bad to worse, from -2.5% in 1Q13 to -2.9% in 2Q13, and has fallen to -4.4% in 3Q13 to-date. Lastly, while fine dining started out the year quite healthy at +2.3% in 1Q13, it then weakened to +1.2% in 2Q13, and is now flat vs. year ago in 3Q13 to-date.”

“To help understand why on-premise trends have been suffering, some of the commentary from our sister company, Consumer Edge Research, is informative in understanding the underlying drivers of this weakness,” said Peter Reidhead, VP of Strategy and Insights at GuestMetrics. “Based on the monthly survey that CER has been conducting on the broad state of the US consumer for almost four years now, its survey has shown consumers have scaled back their spending across dozens of discretionary categories since about late spring. CER has indicated while it’s difficult to pinpoint the precise cause of the pullback, the one bright spot is that discretionary spending in early August showed a slight improvement across all income groups, which could potentially be a positive sign for on-premise in the coming weeks if that trend holds.”

About GuestMetrics LLC
GuestMetrics, LLC is revolutionizing how the hospitality industry operates. Despite the dawn of the Digital Age having begun more than three decades ago, the hospitality industry essentially functions the same way it did centuries before. GuestMetrics has cracked the code by collecting check-level data from over ten thousand restaurants closely representative of the broad on-premise sector across geographies, and with respect to the make-up of casual dining, bars/clubs, fine dining, and lodging. GuestMetrics turns billions of raw transactions into intelligible information that is fundamentally transforming the business operations of everyone from the independently-owned bar/restaurant on the corner, to multi-national chains, to the food & beverage companies that supply them. Please visit www.GuestMetrics.com for more information and to schedule a free demonstration.

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5 thoughts on “On-premise beer (and wine and spirits) sales off to ugly start in Q3, says GuestMetrics

  1. How has ‘premise’ (i.e. an idea) come to mean ‘premises’? They are two completely different words.

  2. That is an interesting question. First, “premises” to describe both one location and multiple locations doesn’t make any sense. And in the business world, the word “on-premises” or “on-premise” is often followed by the word “sales.” I just think it’s more natural to omit the extra s when talking about it. So over time, it has become accepted even though Merriam-Webster has not caught on yet.

  3. Pingback: NEWS FETCH – August 23, 2013 | Wine Industry Insight

  4. not sure what data this service is looking at or ignoring. craft beer sales in on-premise is screaming nationally into triple digit growth right now. Our business is up over 250% this year alone and 70% of what we do is on-premise in over 20 metro markets across the U.S. (and all we do is craft beer)

    If you include national chain restaurants and national industrial beer producers, then you will skew the numbers to reflect negative growth. It should be pulled apart and looked at from a segment view including independent restaurants and small batch artisan beer producers. This growth is off the charts and has been for 3 years. There have been amazing inroads by these producers (over 1000 new U.S. Breweries in the last 2 years according to the TTB) in on-premise gastro pubs, brew pubs and fine dining independent restaurants.

    The national chains continue to kowtow to the national producers and do not react fast enough to recognize that the consumer is and has been buying elite, premium beer instead of the yellow fizzy soda they can’t call beer in Europe due to all the added adjuncts.(corn, rice, gluten extracts). This is why articles like this report partial truth in what has been a growing trend nationally for over 3 years. The U.S. consumer is turning away from National Industrial brands in record numbers especially in on-premise markets for a better selection.

    Wegmans Markets, Safeway, Weis markets, APLUS+, Sheetz, along with many other national OFF-PREMISE companies are adding on-premise licenses and pubs to their business for the extreme growth craft beer sales provide. Craft Beer is in a growth mode in every market segment across the U.S.

  5. Thanks for the comment, George. This service usually only gives a very high level overview on trends. With beer in decline as a category as light beer dominates the market, I think you will continue to see this. But there are also stories that we share that convey craft beer’s growth. Anyone following this site regularly will get a clear picture of the industry but yes, some pieces, if looked at it in isolation, will sometimes (or often) lack the context of everything else happening.

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