Restaurant Trends Slow, Especially In Beer

While the temporary resolution of the federal government shutdown can be expected to help boost restaurant traffic in coming weeks, things were already slow according to a recent report by a consulting firm. Slower still has been the trends of beer sales on-premise, according to two recent reports.

The GuestMetrics report on the quarterly performance at full service restaurants and bars found that the third quarter recently ended was the softest this year, with things not apparently improving in October. Overall sales comps are still above levels from last year, but have softened since the summer. All segments within full-service restaurants and bars have seen traffic slow through early October, but by far the worst trends are being experienced by bars and clubs, with traffic six percent below last year, according to GuestMetrics.

Spirit, Beer and Wine Trends

Beverage sales, with or without alcohol, are below levels from last year, and they, too, weakened into early October. Beer, wine and spirits have all been experiencing difficult trends over the past few months, says the company. But it’s been an overall bad year for beer, down -1.9 percent during the most recent 4-week period through early October compared to last year. Wine also softened, consistent with a slow down in higher income consumers, while spirits growth slowed yet is still above levels seen during the prior year.

That beer slowdown is confirmed by the Technomic report, BeerTAB, released earlier this month. The beer industry had reversed its downward trend of recent years to post both volume and dollar gains in 2012, but the report shows that momentum is slowing this year. The 2013 BeerTAB (Trends in Adult Beverage) Report reveals that following a 1.3 percent decline in 2011, total beer volume increased 1.2 percent to 2.8 billion 2.25-gallon cases in 2012, and retail dollars rose 3.5 percent to $62.3 billion.

"Mainstream domestic beer performance was buoyed somewhat by the continued growth of super-premium labels such as Blue Moon and the retro-hip brands including Pabst Blue Ribbon. The mainstream domestic category's rate of decline slowed in 2013," says Eric Schmidt, director of research at Technomic. "Light beer remained the largest category, and volume expanded slightly as Bud Light was flat, Coors Light grew and Bud Light Platinum added 20,000 cases to the market."

Schmidt added that the largest beer categories faired considerably better in 2012 than they did in 2011, although the industry's momentum really came from imported and craft beer, flavored malt beverage and cider. Craft growth continues as craft beer posted one of the largest percent gains of any beer category - 14.4 percent - and now accounts for 6.3 percent of total beer volume. Its upward trajectory is continuing in 2013.

According to GuestMetrics, while spirits and wine both saw volume trends improve slightly through mid-August, beer trends deteriorated, with growth slowing across all segments of beer.

“Net of all of the above, beer’s loss of alcohol share has accelerated over the past few months, and saw its worst share loss in mid-August since the very beginning of the year,” said Brian Barrett, president of GuestMetrics. “As we’ve written about extensively, restaurant and bars have generally been having a tough 2013 as much of the broad consumer base remains under economic pressure, but unfortunately the beer category has been under-performing overall on-premise and alcohol trends throughout much of the year, with this quarter on pace to be the weakest of the year.”


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