A Measured View (Jan 07)

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a measured view

january sales

liquid assets, a measured view, january 2007, COMMENTS

“January Sales” - the time-old response by retailers to the post Christmas lull in trading as we all count the cost of the festive season, tighten our belts and wait for that pay cheque at the end of the month. Unfortunately, the social impact of binge drinking limits an operator’s ability to offer New Year bargains. Given the increasing pressure from the Home Office to see responsible retailing in all its forms, any venue resorting to excessive promotions to pull in the punters is likely to be the subject of a visit by the police.

With 20,396 venues now sited on the high street (compared to 15,307 in 1998) competition is fiercer than ever yet operators know this is no excuse to engage in irresponsible promotions. Health Secretary, Patricia Hewitt MP is talking about an increase in duty being an effective way of reducing binge drinking. While this is misguided (GB already has the third highest rate of duty in the EU) we cannot afford to give her any more ammunition. With the spectre of ‘alcohol disorder zones’ on the horizon and growing Government concern at venues ‘serving to drunks’ there is ever more pressure on operators to be seen to be responsible retailers.

And on the whole, they are. CGA’s last survey of promotional activity took in 1250 venues and 13,934 individual promotions across the country. We found that operators are moving away from multi-purchase promotions on bottled beers and RTDs (down from 17% to 7%); and shifting from ‘doubling up’ (down from 49% to 25%) to permanently low prices (up from 40% to 65%). Interestingly, since licensing reform the level of promotional activity at the local pub (45%) has overtaken activity at the late night club/bar (40%). All in all, irresponsible promotions are few and far between with only a handful of venues offering promotions linked to live sport or the soon to be illegal ‘Ladies Night’.

But what about the off trade? To date, they have been able to talk responsibility while pricing alcohol at a level that would see most bars closed down. But things are slowly changing. The Home Office has brought them in to the conversation, the Competition Commission inquiry into supermarkets is being used to raise concerns; the Scottish Executive has commissioned research to see if there is a link between off-trade promotions and excessive drinking; and the issue is due for further exposure in Parliament as a number of MPs look to raise concerns about the impact excessively cheap alcohol is having on the lives of their constituents.

For now, operators need to stick to their guns provide an excellent night out in a safe environment and wait, as is often the way, for regulators to catch up.

From: January 2007 Issue

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