While consumers’ Covid concerns have significantly eased, polarisation between premiumisation and value for money is underway, according to on-premise measurement, insight and research consultancy CGA.

Cost of living concerns are driving the polarisation, CGA said, in its latest Australia On Premise Consumer Pulse, a free consumer research report that checks in with 750 Australian On Premise visitors on a monthly basis.

The Pulse aims to record patrons’ recent behaviour, how they feel about the channel (including Covid restrictions), and their intentions for visits in the month ahead.

“This month’s research highlights that concerns around COVID-19 have continued to decrease, with plans to visit bars and restaurants on the rise,” CGA said.

Only 9 per cent of all consumers said they were visiting the channel less because of the rise in cases, down from 23 per cent in the previous month.

Cost of living concerns

Worries around cost of living, however, increased on the previous month, CGA said, with more consumers saying they were visiting less due to disposable income challenges.

At the other end of the spectrum, however, 58 per cent of Australians say they are now more willing to ‘treat themselves to make up for lost time’ as they return to the channel.

“This mindset is leading to signs of premiumisation, with over a third purchasing a premium drink option in the past month,” CGA said.

According to CGA, a balanced strategy focused on both Value and Premium offering is likely to be beneficial, as had been seen in other markets further down the recovery path than Australia.

“Mainstream brands sitting between these two positions can become exposed in these situations so communication, in-venue brand awareness and appropriate positioning is essential,” CGA said.

The power of promotions

CGA suggested that for those facing disposable income challenges, promotions can work extremely well to drive footfall, increase dwell time and overall spend.

“Key for suppliers here is helping operators see the need to appeal to this group of cash-strapped consumers and to actively spend promotional funds where available.”

Scott Elliott, CGA managing director – Americas & Asia Pacific, said whilst it is clear that the channel is slowly recovering, with some way still to go, many Australian consumers are facing quite different challenges.

“Those with reduced disposable income need reasons to enter the trade – with events, drinks promotion and transparent pricing tactics likely to help drive footfall.

“For those looking to treat themselves, a clear upselling strategy by suppliers and operators which are relevant to a changed Path to Purchase is essential.

“Although operationally-efficient serves such as draft cocktails are appealing to all, the product, presentation and messaging needs to be strong to maintain quality cues and premium value-for-money perceptions in the eye of the On Premise consumer.”

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