Off-licences - UK - July 2003 - Market Research Report

Contents

Introduction and Abbreviations
Introduction
Definitions
Financial definitions
Research methodology
Abbreviations
Executive Summary
What's the deal?
Cheaper beer
Different approaches needed in order to compete
Retailing convenience
Other distribution channels
Consumers want more for less
Booze cruising less popular
Stereotypes come to light
Affluence and availability key to booming market
Where do consumers prefer to buy alcohol?
What do we like to drink most frequently?
Frequency of purchase from an off-licence
Factors that might encourage a visit to an off-licence
Who sells what?
Retail practices
The future
Retail Sales
Figure 1: All retail sales and sales through specialist off-licences, at current prices, 1995-2003
Figure 2: All retail sales and sales through specialist off-licences, at constant 1995 prices,
1995-2003
Figure 3: Retail sales through all food retailers and sales through specialist off-licences, at current prices, 1995-2003
Figure 4: Retail sales through all food retailers and sales through specialist off-licences, at constant 1995 prices, 1995-2003
Figure 5: Retail sales through large food stores, small food stores and retailers of alcoholic and
other beverages, at current prices, 1995-2003
Figure 6: Retail sales of large and small food stores and sales through specialist off-licences, at constant 1995 prices, 1995-2003
Sector Structure
Figure 7: Number of specialist off-licence businesses, classified by turnover sizeband, 1998-2002
Retail outlets with alcohol licences
Figure 8: Retail outlets with an alcohol licence in Great Britain, 2001-03
Multiple grocers and Co-ops
Figure 9: Leading grocery multiples, by turnover and number of outlets, 2002/03
Specialist multiples
Figure 10: Leading specialist off-licence chains, 2002
Independent specialists/symbol groups and convenience stores
Figure 11: Ownership of leading chains of convenience stores, 2002/03
Forecourt retailing
Other retail formats
The Internet
The supply chain
Training and development in the off-licence sector
Trade associations and industry representation
Consumer Expenditure
Consumer expenditure on alcoholic drinks (on and off trade)
Figure 12: Consumer expenditure on alcoholic drinks, at current and constant 1995 prices,
1995-2002
Consumer expenditure on alcoholic drinks by channel
Figure 13: Indexed growth of consumer expenditure on alcoholic drinks, through the on and off
trade, at current prices, 1995-2002
Figure 14: Consumer expenditure on alcoholic drinks, through the on and off trade, at current prices, 1995-2002
Figure 15: Indexed growth of consumer expenditure on alcoholic drinks, through the on and off
trade, at constant 1995 prices, 1995-2002
Figure 16: Consumer expenditure on alcoholic drinks, through the on and off trade, at constant
1995 prices, 1995-2002
Consumer spending on alcohol in the off-trade
Figure 17: Retail sales of alcoholic drinks (off-trade), at current and constant 1995 prices,
1995-2002
Off trade and specialist off-licences
Figure 18: Indexed growth of retail sales of alcoholic drinks (off trade), and sales through specialist
off-licences, at current prices, 1995-2002
Figure 19: Retail sales of alcoholic drinks (off trade), and sales through specialist off-licences, at current prices, 1995-2002
Sales by product category
Figure 20: Consumption of alcoholic drinks, by type, 1990 and 2002
Beer
Figure 21: Retail sales of beer, current and constant 1995 prices, 1995-2002
Wine, cider and FABs
Figure 22: Retail sales of wine, at current and constant 1995 prices, 1995-2003
Spirits
Figure 23: Retail sales of spirits and liquers, at current and constant 1995 prices, 1995-2003
Regional Shopping Variations
Figure 24: Expenditure on alcoholic drinks and tobacco, per household per week, by region,
2000-01
Market Factors
The economy and PDI
Figure 25: PDI and consumer expenditure, at constant 1997 prices, 1997-2006
Figure 26: Annual growth in PDI after inflation with growth in spending on alcoholic drinks, at
constant 1998 prices, 1998-2002
Improved availability
Health
Figure 27: UK consumption of alcoholic drinks, by gender, 1998 and 2000
Figure 28: Those not drinking alcohol, represented as a percentage of the population, 1997-2000
Fashion
Rates of excise duty
Personal imports and the grey market
Government legislation
Event marketing
Changing lifestyles
Car ownership
Figure 29: Percentage of households with regular use of cars, 1997-2001
Figure 30: Shopping trips, by main mode of transport, (food only) 1999-2001
Seasonality and drink-driving
Figure 31: Number of breath-tests carried out on car drivers involved in injury accidents in Great Britain, 1990-2000
Staying in is the new going out
Consumer Shopping
Where do consumers buy drinks?
Figure 32: Purchases of alcoholic drinks in the last 12 months, by outlet, 2003
Figure 33: Purchases of alcoholic drinks in the last 12 months, by outlet, by gender, April 2003
Figure 34: Purchases of alcoholic drinks in the last 12 months, by outlet, by age, April 2003
Figure 35: Purchases of alcoholic drinks in the last 12 months, by outlet, by socio-economic group, April 2003
Figure 36: Purchases of alcoholic drinks in the last 12 months, by outlet, by region, April 2003
Figure 37: Purchases of alcoholic drinks in the last 12 months, by outlet, by working and marital
status, 2003
Figure 38: The influence of children in the family on the purchase of alcoholic drinks in the last 12 months, by outlet, 2003
Figure 39: Purchases of alcoholic drinks in the last 12 months, by outlet, by lifestage, April 2003
Which products are most frequently purchased?
Figure 40: Most frequent purchases of alcoholic drinks in the last 12 months, by type, 2003
Figure 41: Most frequent purchases of alcoholic drinks in the last 12 months, by gender, April 2003
Figure 42: Most frequent purchases of alcoholic drinks in the last 12 months, by age, 2003
Figure 43: Most frequent purchases of alcoholic drinks in the last 12 months, by type, by socio-economic group, April 2003
Figure 44: Most frequent purchases of alcoholic drinks in the last 12 months, by type, by region,
April 2003
Figure 45: Most frequent purchases of alcoholic drinks in the last 12 months, by working and marital status, April 2003
Figure 46: Most frequent purchases of alcoholic drinks in the last 12 months, by presence of
children, April 2003
Figure 47: Most frequent purchases of alcoholic drinks in the last 12 months, by lifestage,
April 2003
Frequency of purchasing from off-licences
Figure 48: Frequency of purchasing from an off-licence, April 2003
Figure 49: Graph showing frequency of purchasing from an off-licence, by gender, April 2003
Figure 50: Frequency of purchasing from an off-licence, by gender, April 2003
Figure 51: Frequency of purchasing from an off-licence, by age, April 2003
Figure 52: Frequency of purchasing from an off-licence, by socio-economic group, April 2003
Figure 53: Frequency of purchasing from an off-licence, by region, 2003
Figure 54: Frequency of purchasing from an off-licence, by working and marital status, April 2003
Figure 55: Frequency of purchasing from an off-licence, by presence of children, April 2003
Figure 56: Frequency of purchasing from an off-licence, by lifestage, April 2003
Factors influencing off-licence visiting
Figure 57: Top five reasons to visit your local off-licence more often, April 2003
Figure 58: Reasons to visit your local off-licence more often, April 2003
Figure 59: Reasons to visit your local off-licence more often, by gender, April 2003
Figure 60: Reasons to visit your local off-licence more often, by age, April 2003
Figure 61: Reasons to visit your local off-licence more often, by socio-economic group, 2003
Figure 62: Reasons to visit your local off-licence more often, by region, 2003
Figure 63: Reasons to visit your local off-licence more often, by working and marital status,
April 2003
Figure 64: Reasons to visit your local off-licence more often, by presence of children, April 2003
Figure 65: Reasons to visit your local off-licence more often, by lifestage, April 2003
Cluster analysis
Figure 66: Off-licence clusters, by demographic sub-group, lifestage, Mintel's Special Groups and ACORN categories, April 2003
Retail Market Shares
Figure 67: Distribution of all alcoholic beverages, by volume, 1998-2003
Figure 68: Alcoholic drinks market, estimated market value shares held by major retail chains,
1998 and 2002
Major Off-licence Chains
Multiple specialists
Figure 69: Major specialist off-licence chains, number of outlets, 2000 and 2002
The Thresher Group
Background
Financial performance
Figure 70: First Quench/Thresher Group, financial performance, 1999-2002
Figure 71: Trading names of the Thresher Group, 2002
Recent developments
Maryland Securities (formerly Cellar 5/Parisa)
Background
Financial performance
Figure 72: Parisa/Cellar 5 group, financial performance, 1998-2001
Recent developments
Oddbins/Nicolas
Background
Financial performance
Figure 73: Oddbins, financial performance, 1997-2002
Recent developments
Bargain Booze
Background
Financial performance
Figure 74: Bargain Booze, financial performance, 1999-2001
Recent developments
Unwins
Background
Financial performance
Figure 75: Unwins, financial performance, 1998-2002
Recent developments
Majestic Wine
Background
Financial performance
Figure 76: Majestic Wine plc, financial performance, 1998/99-2002/03
Recent developments
Direct sales, mail order and home delivery
Virgin Wines
Grocery multiples and Co-operatives
Tesco
Background
Figure 77: Trading fascia names of the Tesco Group, 2002
Product range and product promotion
Financial performance
Figure 78: Tesco UK, financial performance, 1998-2003
Sainsbury's
Background
Figure 79: Trading fascia names of the Sainsbury Group, 2002
Product range and product promotion
Financial performance
Figure 80: Sainsbury's, financial performance, 1998-2003
Asda
Background
Product range and product promotion
Financial performance
Figure 81: Asda, financial performance, 1997-2001
Safeway
Background
Product range and product promotion
Financial performance
Figure 82: Safeway, financial performance, 1998-2003
Morrisons/Wm Morrison
Background
Product range and product promotion
Financial performance
Figure 83: Morrisons, financial performance, 1998-2003
Somerfield and Kwik Save
Background
Product range and product promotion
Financial performance
Figure 84: Somerfield plc including Kwik Save, financial performance, 1998-2003
Budgens
Background
Marks & Spencer
Background
Product range and product promotion
Financial performance
Figure 85: Marks & Spencer, financial performance, 1998-2003
Waitrose
Background
Product range and product promotion
Financial performance
Figure 86: Waitrose, financial performance, 2000-03
Co-operative Societies
The Co-operative group
Background
Product range and product promotion
Financial performance
Figure 87: The Co-operative Group, financial performance, 2001-2003
The convenience sector
Forecourt retailing
Others
Retail Practices and Operational Issues
EDLP
Own-label
Understanding the customer
Improved merchandising techniques
Packaging
The Future
Prohibition for drink advertising?
Tougher marketing code in place
New World drives wine market growth
ID cards a step closer?
Education still important
Further growth in home-based leisure and entertainment
The battle for Safeway
24-hour licensing and the threat of red tape
The gift market and Christmas
Innovation through packaging	Budgens to launch Quickstop
Health
Independents to smarten up their act
Greater focus on environmental concerns
Forecast
Figure 88: Forecast of off-trade alcoholic drinks sales, 2002-07
Figure 89: Forecast of retail sales through specialist off-licences, 2002-07
Appendix: Research methodology
Index of reports

Retailing convenience

Other distribution channels

Consumers want more for less

Booze cruising less popular

Stereotypes come to light

Affluence and availability key to booming market

Where do consumers prefer to buy alcohol?

What do we like to drink most frequently?

Frequency of purchase from an off-licence

Factors that might encourage a visit to an off-licence

Who sells what?

Retail practices

The future

Retail Sales

Figure 1: All retail sales and sales through specialist off-licences, at current prices, 1995-2003

Figure 2: All retail sales and sales through specialist off-licences, at constant 1995 prices,

1995-2003

Figure 3: Retail sales through all food retailers and sales through specialist off-licences, at current prices, 1995-2003

Figure 4: Retail sales through all food retailers and sales through specialist off-licences, at constant 1995 prices, 1995-2003

Figure 5: Retail sales through large food stores, small food stores and retailers of alcoholic and

other beverages, at current prices, 1995-2003

Figure 6: Retail sales of large and small food stores and sales through specialist off-licences, at constant 1995 prices, 1995-2003

Sector Structure

Figure 7: Number of specialist off-licence businesses, classified by turnover sizeband, 1998-2002

Retail outlets with alcohol licences

Figure 8: Retail outlets with an alcohol licence in Great Britain, 2001-03

Multiple grocers and Co-ops

Figure 9: Leading grocery multiples, by turnover and number of outlets, 2002/03

Specialist multiples

Figure 10: Leading specialist off-licence chains, 2002

Independent specialists/symbol groups and convenience stores

Figure 11: Ownership of leading chains of convenience stores, 2002/03

Forecourt retailing

Other retail formats

The Internet

The supply chain

Training and development in the off-licence sector

Trade associations and industry representation

Consumer Expenditure

Consumer expenditure on alcoholic drinks (on and off trade)

Figure 12: Consumer expenditure on alcoholic drinks, at current and constant 1995 prices,

1995-2002

Consumer expenditure on alcoholic drinks by channel

Figure 13: Indexed growth of consumer expenditure on alcoholic drinks, through the on and off

trade, at current prices, 1995-2002

Figure 14: Consumer expenditure on alcoholic drinks, through the on and off trade, at current prices, 1995-2002

Figure 15: Indexed growth of consumer expenditure on alcoholic drinks, through the on and off

trade, at constant 1995 prices, 1995-2002

Figure 16: Consumer expenditure on alcoholic drinks, through the on and off trade, at constant

1995 prices, 1995-2002

Consumer spending on alcohol in the off-trade

Figure 17: Retail sales of alcoholic drinks (off-trade), at current and constant 1995 prices,

1995-2002

Off trade and specialist off-licences

Figure 18: Indexed growth of retail sales of alcoholic drinks (off trade), and sales through specialist

off-licences, at current prices, 1995-2002

Figure 19: Retail sales of alcoholic drinks (off trade), and sales through specialist off-licences, at current prices, 1995-2002

Sales by product category

Figure 20: Consumption of alcoholic drinks, by type, 1990 and 2002

Beer

Figure 21: Retail sales of beer, current and constant 1995 prices, 1995-2002

Wine, cider and FABs

Figure 22: Retail sales of wine, at current and constant 1995 prices, 1995-2003

Spirits

Figure 23: Retail sales of spirits and liquers, at current and constant 1995 prices, 1995-2003

Regional Shopping Variations

Figure 24: Expenditure on alcoholic drinks and tobacco, per household per week, by region,

2000-01

Market Factors

The economy and PDI

Figure 25: PDI and consumer expenditure, at constant 1997 prices, 1997-2006

Figure 26: Annual growth in PDI after inflation with growth in spending on alcoholic drinks, at

constant 1998 prices, 1998-2002

Improved availability

Health

Figure 27: UK consumption of alcoholic drinks, by gender, 1998 and 2000

Figure 28: Those not drinking alcohol, represented as a percentage of the population, 1997-2000

Fashion

Rates of excise duty

Personal imports and the grey market

Government legislation

Event marketing

Changing lifestyles

Car ownership

Figure 29: Percentage of households with regular use of cars, 1997-2001

Figure 30: Shopping trips, by main mode of transport, (food only) 1999-2001

Seasonality and drink-driving

Figure 31: Number of breath-tests carried out on car drivers involved in injury accidents in Great Britain, 1990-2000

Staying in is the new going out

Consumer Shopping

Where do consumers buy drinks?

Figure 32: Purchases of alcoholic drinks in the last 12 months, by outlet, 2003

Figure 33: Purchases of alcoholic drinks in the last 12 months, by outlet, by gender, April 2003

Figure 34: Purchases of alcoholic drinks in the last 12 months, by outlet, by age, April 2003

Figure 35: Purchases of alcoholic drinks in the last 12 months, by outlet, by socio-economic group, April 2003

Figure 36: Purchases of alcoholic drinks in the last 12 months, by outlet, by region, April 2003

Figure 37: Purchases of alcoholic drinks in the last 12 months, by outlet, by working and marital

status, 2003

Figure 38: The influence of children in the family on the purchase of alcoholic drinks in the last 12 months, by outlet, 2003

Figure 39: Purchases of alcoholic drinks in the last 12 months, by outlet, by lifestage, April 2003

Which products are most frequently purchased?

Figure 40: Most frequent purchases of alcoholic drinks in the last 12 months, by type, 2003

Figure 41: Most frequent purchases of alcoholic drinks in the last 12 months, by gender, April 2003

Figure 42: Most frequent purchases of alcoholic drinks in the last 12 months, by age, 2003

Figure 43: Most frequent purchases of alcoholic drinks in the last 12 months, by type, by socio-economic group, April 2003

Figure 44: Most frequent purchases of alcoholic drinks in the last 12 months, by type, by region,

April 2003

Figure 45: Most frequent purchases of alcoholic drinks in the last 12 months, by working and marital status, April 2003

Figure 46: Most frequent purchases of alcoholic drinks in the last 12 months, by presence of

children, April 2003

Figure 47: Most frequent purchases of alcoholic drinks in the last 12 months, by lifestage,

April 2003

Frequency of purchasing from off-licences

Figure 48: Frequency of purchasing from an off-licence, April 2003

Figure 49: Graph showing frequency of purchasing from an off-licence, by gender, April 2003

Figure 50: Frequency of purchasing from an off-licence, by gender, April 2003

Figure 51: Frequency of purchasing from an off-licence, by age, April 2003

Figure 52: Frequency of purchasing from an off-licence, by socio-economic group, April 2003

Figure 53: Frequency of purchasing from an off-licence, by region, 2003

Figure 54: Frequency of purchasing from an off-licence, by working and marital status, April 2003

Figure 55: Frequency of purchasing from an off-licence, by presence of children, April 2003

Figure 56: Frequency of purchasing from an off-licence, by lifestage, April 2003

Factors influencing off-licence visiting

Figure 57: Top five reasons to visit your local off-licence more often, April 2003

Figure 58: Reasons to visit your local off-licence more often, April 2003

Figure 59: Reasons to visit your local off-licence more often, by gender, April 2003

Figure 60: Reasons to visit your local off-licence more often, by age, April 2003

Figure 61: Reasons to visit your local off-licence more often, by socio-economic group, 2003

Figure 62: Reasons to visit your local off-licence more often, by region, 2003

Figure 63: Reasons to visit your local off-licence more often, by working and marital status,

April 2003

Figure 64: Reasons to visit your local off-licence more often, by presence of children, April 2003

Figure 65: Reasons to visit your local off-licence more often, by lifestage, April 2003

Cluster analysis

Figure 66: Off-licence clusters, by demographic sub-group, lifestage, Mintel's Special Groups and ACORN categories, April 2003

Retail Market Shares

Figure 67: Distribution of all alcoholic beverages, by volume, 1998-2003

Figure 68: Alcoholic drinks market, estimated market value shares held by major retail chains,

1998 and 2002

Major Off-licence Chains

Multiple specialists

Figure 69: Major specialist off-licence chains, number of outlets, 2000 and 2002

The Thresher Group

Background

Financial performance

Figure 70: First Quench/Thresher Group, financial performance, 1999-2002

Figure 71: Trading names of the Thresher Group, 2002

Recent developments

Maryland Securities (formerly Cellar 5/Parisa)

Background

Financial performance

Figure 72: Parisa/Cellar 5 group, financial performance, 1998-2001

Recent developments

Oddbins/Nicolas

Background

Financial performance

Figure 73: Oddbins, financial performance, 1997-2002

Recent developments

Bargain Booze

Background

Financial performance

Figure 74: Bargain Booze, financial performance, 1999-2001

Recent developments

Unwins

Background

Financial performance

Figure 75: Unwins, financial performance, 1998-2002

Recent developments

Majestic Wine

Background

Financial performance

Figure 76: Majestic Wine plc, financial performance, 1998/99-2002/03

Recent developments

Direct sales, mail order and home delivery

Virgin Wines

Grocery multiples and Co-operatives

Tesco

Background

Figure 77: Trading fascia names of the Tesco Group, 2002

Product range and product promotion

Financial performance

Figure 78: Tesco UK, financial performance, 1998-2003

Sainsbury's

Background

Figure 79: Trading fascia names of the Sainsbury Group, 2002

Product range and product promotion

Financial performance

Figure 80: Sainsbury's, financial performance, 1998-2003

Asda

Background

Product range and product promotion

Financial performance

Figure 81: Asda, financial performance, 1997-2001

Safeway

Background

Product range and product promotion

Financial performance

Figure 82: Safeway, financial performance, 1998-2003

Morrisons/Wm Morrison

Background

Product range and product promotion

Financial performance

Figure 83: Morrisons, financial performance, 1998-2003

Somerfield and Kwik Save

Background

Product range and product promotion

Financial performance

Figure 84: Somerfield plc including Kwik Save, financial performance, 1998-2003

Budgens

Background

Marks & Spencer

Background

Product range and product promotion

Financial performance

Figure 85: Marks & Spencer, financial performance, 1998-2003

Waitrose

Background

Product range and product promotion

Financial performance

Figure 86: Waitrose, financial performance, 2000-03

Co-operative Societies

The Co-operative group

Background

Product range and product promotion

Financial performance

Figure 87: The Co-operative Group, financial performance, 2001-2003

The convenience sector

Forecourt retailing

Others

Retail Practices and Operational Issues

EDLP

Own-label

Understanding the customer

Improved merchandising techniques

Packaging

The Future

Prohibition for drink advertising?

Tougher marketing code in place

New World drives wine market growth

ID cards a step closer?

Education still important

Further growth in home-based leisure and entertainment

The battle for Safeway

24-hour licensing and the threat of red tape

The gift market and Christmas

Innovation through packaging

Budgens to launch Quickstop

Health

Independents to smarten up their act

Greater focus on environmental concerns

Forecast

Figure 88: Forecast of off-trade alcoholic drinks sales, 2002-07

Figure 89: Forecast of retail sales through specialist off-licences, 2002-07

Appendix: Research methodology

Index of reports

RP July 2003