UK Beer Sales Switching From Pubs to Supermarkets

Photo: REUTERS

This is fascinating: the Telegraph is reporting in the UK, supermarket beer sales are poised to overtake pub beer sales for the first time.  The thing that always struck me about the beer scene in the UK was precisely the fact that almost all drinking happened in pubs and there was very little beer for sale in the markets and little found in household refrigerators. Seeing the 'off license' sign, signifying their ability to sell take-away beer, outside the little markets was a rarity. From the article:

Back in the 1970s more than 90pc of all beer drunk in Britain was bought from the "on trade" – pubs and clubs, with less than 10pc brought from the "off trade" of supermarkets and off-licences.

According to the British Beer &Pub Association this ratio had fallen to 50.9pc from pubs and 49.1pc from supermarkets at the end of last year. "It will cross over in the near future," said a spokesman, possibly as soon as this Christmas.

Why? Well, the pub scene in Britain is in crisis suggesting that the changing lifestyles are leading more and more people to find their entertainment in the home instead of outside it.

Pub closures hit a record rate of 53 a week at the height of the recession. Last year, 26 a week closed their doors, leaving just 52,500 pubs in Britain, nearly half of the level at its peak before the World War II.

The Beer & Pub Association blamed competition from the supermarkets, which often sell beer as a "loss leader" to drive customers into their stores, and above-inflation increases to beer duty. The GMB blamed large pub companies putting up their prices because they were struggling with too many debts.

The GMB has calculated that the average price of a pint of lager cost 93p at a pub in 1987. If it had risen in line with the Retail Prices Index measure of inflation it would now be £2.18, but in fact it has climbed to £3.09, making it unaffordable as a daily staple for many consumers, already hit by rising utility bills, petrol prices and salaries which have been frozen.

Leaving aside the humorous notion of beer being a daily staple of British life, I think the blame is misplaced if it is aimed at pricing strategies of supermarkets. There is always a premium to be paid in a pub, after all, but the sea change we are seeing now has come during a time (until recently) of great prosperity in Britain, so I think the changing lifestyle explanation carries more water.