Low spirits: Competitive pressure and falling alcohol consumption cause revenue to decline

Off-licences are licensed to sell alcoholic beverages to be consumed off their premises. The Off-Licences industry has endured challenging operating conditions over the past five years. Industry performance has been hindered by intense competition, particularly following the commencement of the supermarket price war in 2014, which entailed significant price reductions across a wide range of alcoholic beverages. In order to remain competitive, industry operators have had to follow suit, at the expense of profit margins. Off-licences have also faced increased competition from online-only retailers, which can offer lower prices due to their lower overhead costs. Over the five years through 2018-19, industry revenue is anticipated to decline at a compound annual rate of 1.7% to £2.8...read more.

Industry Statistics & Market Size
Revenue
£2.8bn
Annual Growth 14-19
-1.7%
Forecast Growth 19-24
Profit
Employment
18,114
Businesses
4,033

Industry Threats & Opportunities

  • Cheap supermarket prices have increased external competition and restricted demand
  • Off-licences buckled under the pressure of competition from supermarkets
  • Supermarkets’ expansion into the convenience market is expected to place pressure on the industry
  • Industry Report - Industry Products Chapter

    WineIBISWorld estimates that wine sales account for 33.7% of industry revenue. In recent years, growth in expenditure on wine has far outstripped spending on beer and spirits. Retailers such as Majestic Wine that specialise in the sale of wine have performed strongly over the past five years. Changing drinking habits, such as consumers increasingly drinking wine at home, has benefited demand for wine from off-licences. However, to some extent, the rise in demand for more sophisticated, premium wine has led to increased competition from on-licence establishments, although this is expected to have been limited to high-income consumers that find drinking at restaurants and bars more affordable. Ope...purchase to read more.

    Additional Insights for the Off-Licences Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Off-Licences Industry are

  • Access to highly skilled workforce
  • Production of premium goods/services
  • Having links with suppliers
  • IBISWorld analysts also discuss how external factors such as trade alcohol prices and Real household disposable income in the Off-Licences industry impact industry performance..

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    What's in this report

    What is the Off-Licences Industry?

    Operators in this industry are specialised retailers licensed to sell alcoholic beverages for consumption off the premises. The industry does not include supermarkets and grocery-focused convenience stores that may also have this licence.

    Industry Products
  • Wine
  • Spirits
  • Beer
  • Other alcoholic beverages
  • Non-alcoholic beverages
  • Food and snacks
  • Industry Activities
  • Retailing beer
  • Retailing wine
  • Retailing spirits
  • Retailing cider
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • trade alcohol prices
  • Real household disposable income
  • Alcohol consumption per capita
  • Demand from pubs and bars
  • Demand from supermarkets

  • Current Performance
  • EU referendum
  • Supermarket pressure
  • Minimum alcohol pricing
  • Pressure mounts
  • Duty calls
  • Profit performance
  • Chart: Revenue Growth

  • Industry Outlook
  • Quality over quantity
  • Competitive pressures
  • Competitive advantages
  • Rising costs
  • Table: Off-Licences Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Off-Licences Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Consumers

  • Key Selling Industries
  • Alcoholic Beverage Wholesaling

  • Products & Services
  • Wine
  • Spirits
  • Beer
  • Other alcoholic beverages
  • Food and snacks
  • Non-alcoholic beverages
  • Chart: Off-Licences Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • People aged between 50 and 64
  • People aged between 65 and 74
  • People aged between 30 and 49
  • People aged under 30
  • People aged 75 and over
  • Chart: Major Market Segmentation for the Off-Licences Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
    ProfitPurchasesWagesRentOther costs
  • Chart: Cost Structure Benchmarking – Sector vs Off-Licences

  • Basis of Competition
    Internal competitionExternal competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Off-Licences Industry

  • Industry Globalization
    Bestway Retail Ltd, Majestic Wine Warehouses Ltd,
  • Table: Bestway Retail Ltd - financial performance
  • Table: Majestic Wine Warehouses Ltd - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Off-Licences Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Off-Licences Industry
    Includes:
  • Industry Revenue (2010-2024)
  • Industry Gross Product (2010-2024)
  • Establishments (2010-2024)
  • Businesses (2010-2024)
  • Employment (2010-2024)
  • Wages (2010-2024)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Off-Licence
  • A retailer licensed to sell alcoholic beverages for consumption off its premises.
  • Perry
  • A drink similar to cider that is made by fermenting pears.
  • Sparkling Wine
  • A wine that is fizzy because it contains high levels of carbon dioxide.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Off-Licences market research report provides the latest industry statistics and industry trends, allowing you to identify the products and customers driving revenue growth and profitability. The industry report identifies the leading companies and offers strategic industry analysis of the key factors influencing the market.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Off-Licences:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Off-Licences market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Off-Licences, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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