CGA by NIQ’s recent Global REACH report has outlined some key on-premise strategies for coping with a tougher econimic situation, shedding light on how consumer behaviour is changing.

Rising operating costs are the highest concern among venue operators, with 86 per cent citing this as a current challenge. Other difficulties for the on-premise are staffing issues and property costs, both at 75 per cent, with supply chain issues following closely at 74 per cent. Changes in consumer behaviour are a concern for 69 per cent of operators, and the same percentage are still coping with disruptions due to COVID-19. Understanding current consumer behaviours may help operators mitigate these issues and even increase their customer base.

Treats and experimentation

As the cost-of-living rises, many operators are concerned that consumers will decrease their spending in the on-premise. However, CGA data indicated that 22 per cent of consumers are actually seeking to increase their on-prem spending, which is second only to spending on holidays.

“It’s that affordable treat, that mini luxury that consumers don’t want to give up despite how hard they’re being squeezed,” explained research and insight director Charlie Mitchell.

This increased spending on holidays will also benefit the on-premise, as we will see more domestic and foreign tourists, who eat more than 60 per cent of their meals in pubs or restaurants.

The premiumisation trend is also evident in the on-premise with customers opting for “less but better”. When in the on-premise, 44 per cent of consumers would prefer two premium, high quality drinks, and 22 per cent would chose a single super premium drink.

Trust and planning

Pre-planning is becoming a major factor when it comes to visiting the on-premise, as customers are seeking high-quality experiences for the money they are spending. In 2021, 44 per cent of consumers said they were more likely to plan a visit to the on-prem compared to pre-COVID, and that figure is now 58 per cent, with 28 per cent of those consumers also saying that they were more likely to plan than in 2022. This means that online presence is a major way for venues to draw in new customers.

However, there is a trend towards experimentation when ordering in the on-premise, particularly in the millennial age bracket. Over half of consumers choose different drinks in the on-premise compared to when they are at home, rising to 2 in 3 when it comes to Generation Z.

Furthermore, 44 per cent don’t make their mind up about drinks until they are in a venue, providing a great opportunity for knowledgeable bar staff to make recommendations. Even so, evidence is showing that trust is key when it comes to taking these recommendations, with 41 per cent of consumers saying that they are most likely to take drinks or venue advice from their friends.

“Consumers will only trade up if they are sure that the brands that they are trading up to are reliable and high quality,” said Mitchell.

For this reason, improving service is the biggest point of focus for operators, with 38 per cent saying this is their top area for improvement. Consumers are becoming more discerning, with 46 per cent saying that they would never visit a venue again after one bad experience.

CGA also advises operators to orient towards local trendsetters, with data showing that the more knowledgeable a consumer is, the more likely they are to trade up. Twenty per cent of consumers believe they are extremely knowledgeable about alcohol, and 82 per cent are more likely to trade up in the on-premise. They are also the most frequent visitors to the on-premise, with 81 per cent visiting weekly. Of the 38 per cent of consumers with decent knowledge of alcohol, 63 per cent visit weekly and they are 63 per cent more likely to trade up. Attracting these consumers is becoming increasingly important in growing the popularity of a venue.

“We’re looking at that micro level: how do we influence the influencer, how do we recruit the recruiter,” Mitchell commented.

CGA by NIQ will provide further insights and trends at the Pub Leaders Summit, where James Phillips will be presenting “Local and Global On-Premise Trends”. The Pub Leaders Summit will be held on 24 and 25 July at Eatons Hill Hotel in Brisbane. Get your tickets here.

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