Nielsen Insight: Is take-home immune to Covid-19 impacts?

Since lockdown began in March, the off-trade has absorbed around half the alcohol volume lost from the on-trade, compared to the same period last year.

With the on-trade gradually reopening since July, the off-trade should be looking at ways to maintain some of that spend.

There are some big changes in consumer behaviour that have impacted spend and will continue.

Given the unprecedented impact on the economy and employment, it’s no surprise a third of households are saying income and financial security is lower than it was at the start of year, with almost half of households watching their spend.

Having surveyed our Nielsen Homescan panellists we found the impact of the pandemic on personal finances and feelings around it have generated four distinct groups of spenders.

These range from those shoppers who are constrained – ie they are watching their spending and have changed their habits – through to those who are insulated, and for whom Covid-19 has no impact on their spending habits.

Two of the shopper groups that have emerged have significantly changed their behaviour since the pandemic began.

Taking a deeper look at how their spending patterns have changed can help us better understand how to bolster long-term off-trade success with these groups.

We call these the “constrained new” and “cautious middle spenders”, and these are the two groups seeing the biggest changes in their habits.

CONSTRAINED NEW
The “constrained new” group is generally more affluent but, as a direct result of the pandemic, income and financial security have been newly impacted and they are therefore actively watching their spend. In fact, 73% of shoppers in this group have seen an impact on their work since Covid-19, but when it comes to spending in the off-trade they have not held back.

These shoppers spent an extra £268 million in the off -trade in the latest 12 weeks compared to the same time last year.

They have not only been buying more alcohol, they have also been treating themselves with more expensive choices across beer, cider and spirits. This comes as no surprise, as this group is the most likely to have been eating and drinking out of home pre-Covid.

So, although their disposable income has been impacted overall, they are clearly making cutbacks elsewhere in order to maintain the enjoyment and treats they once had outside by bringing them back into the home.

CAUTIOUS MIDDLE
The “cautious middle” is a group of people who are newly watching their spend, despite not seeing any recent financial impact as a result of Covid. This group is slightly younger and tends to be families with younger children.

The cautious middle is watching its overall spend but still spent an extra £218 million across the off-trade.

They are a savvy bunch who hunt for bigger packs to bring back into the home, not only within the off-trade but across their overall shop. We know bigger packs, especially in the off-trade, can give a perception of better value for money. Cider and beer have been well suited to this shopper group in the past 12 weeks.

Wine has also been incredibly popular with this group as they trade up to more premium offerings to consume in the home.
Week-on-week off -trade alcohol sales appear to be almost immune to the pandemic. Inevitably some of the occasions which were lost from the on-trade will have been made up for in the home.

In the three months of lockdown we’re talking about 352 million out-of-home occasions which have all but disappeared.
Some of these will return as the on-trade reopens but many will be lost as capacity will be reduced and some shoppers and vulnerable people will not yet be comfortable reverting back to old haunts as the virus persists.

The off-trade has a huge opportunity to continue to tap into the desire for at-home occasions, regardless of those whose overall spending habits have differed.

Use innovation to drive awareness of the category but make sure larger packs are readily available across the off-trade for shoppers who may be looking for a better value-for-money offering in these unprecedented times.

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