Press Release: 

Restaurant/Bar trends show some sign of improvement in May but not out of the woods yet

On-Premise Traffic: Traffic to on-premise had a difficult start to the year, with year-over-year traffic at -2.3% in 1Q14 and -2.0% during the 4-week period ending 4/20/14, but has since improved to -1.5% during the 4-week period ending 5/18/14. Dollar sales are up 1.5% for the latest 4 weeks and up 0.9% YTD driven by positive price/mix. After an unusually harsh winter season that hurt traffic and volume trends throughout on-premise, the 4-week period thru 5/18/14 could be a sign that on-premise trends might finally start to improve – although one month doesn’t make a trend.

– Beer: The beer category also had a very difficult beginning of the year, with volumes at -4.6% during 1Q14 and -4.7% during the 4-week period ending 4/20/14, but improved to -4.1% during the 4-week period ending 5/18/14 [beer volumes are -4.7% year-to-date]. Encouragingly, sales were only down 0.9% in the latest 4 weeks driven by +3.2% price/mix as consumers continue to trade up. However, the beer category continues to be outpaced by spirits and wine, and has lost 0.9 share points of total alcohol volumes thus far in ’14.

– Spirits: The spirits category had a soft start to the year, with volumes at -1.0% during 1Q14 and -0.9% during the 4-week period ending 4/20/14, but improved to -0.5% during the 4-week period ending 5/18/14 [spirits volumes are -1.0% year-to-date]. Spirits dollar sales were up a solid 2.1% in the latest 4 weeks driven by 2.6% price/mix. Given spirits’ out-performance relative to beer, spirits has gained +0.7 share points of total alcohol volumes thus far in ’14.

– Wine: The wine category also had a relatively weak beginning of ‘14, with volumes at -2.5% during 1Q14, but has since improved to -1.1% during the 4 weeks thru 4/20 and -1.4% for the 4 weeks thru 5/18 [wine volumes are -2.2% year-to-date]. Wine dollar sales were flat in the latest 4 weeks driven by +1.3% price/mix. Given wine’s out-performance relative to beer, wine has gained almost +0.2 share points of total alcohol volumes thus far in ’14.

– Consumer Edge Research data shows higher income consumers are increasing their discretionary spending with higher levels of confidence, but lower income consumers confidence has deteriorated in recent weeks and as a result they have pulled back on their spending. The lower income consumer pressure has been driven in part by higher food commodity inflation and a deteriorated outlook for their household income and jobs.