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Off-licence sector trends

(last updated 23 August 2024)

What has been happening in the off-licence sector

Trends and influences include:

  • a decline in the average amount of alcohol consumed per person – particularly among younger people. It currently stands at around 18 units per week.
  • Older drinkers (those aged 55-64) are more likely to drink at higher risk levels and are the least likely to not drink.
  • 30% of all alcohol is purchased by just 4% of the population (the heaviest drinkers).
  • a general increase in demand for take-home drinks as a result of a trend towards drinking at home instead of going out. This was compounded by the COVID-19 lockdowns which meant that many hospitality venues were forced to remain closed for weeks on end.
  • the UK economy has been sluggish since the pandemic thanks in part to the war in Ukraine, high energy and fuel costs and low real-term wage increases which have put pressure on consumers' disposable incomes. No change is forecast for the foreseeable future.
  • growing numbers of licenced food and drink venues have closed never to re-open. Between December 2021 and December 2023 7,767 licenced venues closed.
  • a relaxation in the licensing laws, permitting longer opening hours across much of the UK followed by a 're-balancing' of licensing legislation focused on the licensed trade which has had more impact on pubs and clubs.
  • a huge increase in supermarkets' share of the take-home drinks market - intense competition from the supermarkets, including predatory pricing, has led the the closure of many off licences including the former market leader Thresher in the late 2000s.
  • a general trend in drinkers' preferences away from beer consumption and in favour of wine (although the recent rise in popularity of craft beers and sweeter beers have bucked this trend somewhat) - and a trend towards buying less product but better quality.
  • growth in the popularity of online wine retailers and home delivery appsn which tap into the existing off-licence network and home grocery delivery services.
  • energetic new product development by the drinks industry - including fruit-flavoured ciders, pre-mixed cocktails and low-alcohol wines.
  • increased sales of cans of beer and cider linked to sporting events, for example the Football and Rugby World Cup games and the Olympics.
  • increased sales of Prosecco and Champagne as they have become more everyday drinks.
  • an increase in the sales of gin, rum and vodka for home consumption which spiked during the COVID-19 lockdowns.
  • the increasing popularity of Merlot and Shiraz red wines and of Sauvignon Blanc at the expense of Pinot Grigio and Chardonnay.

Considerable efforts have been made by the government and the industry to clamp down on underage and binge drinking, and to improve the nation's health by cutting smoking and getting people to drink more responsibly. As a result, overall alcohol consumption in the UK is declining as many people choose to drink smaller quantities of better-quality products.

Licensing laws

2005 saw the phasing-in of a revised alcohol licensing regime in England and Wales, with the transition completed by the end of November that year.

Off-licences can apply to stay open for up to 24-hours-a-day. More information about alcohol licensing in England and Wales is available on the GOV.UK website.

Mandatory licensing conditions were subsequently brought in to give local authorities greater powers to regulate the sale of alcohol and to ban irresponsible alcohol promotions. The conditions also cover age verification and minimum pricing (see below).

All businesses that sell or supply alcohol (Except members clubs and certain community premises) must have a designated premises supervisor (DPS) that acts as the primary contact for the local government and police. While the DPS does not have to be on-site at all times, they must be contactable.

Scotland's licensing laws were revised in 2009. Some of the changes were similar to those made previously in England and Wales, but the new laws only provide for 24-hour licensing in 'exceptional circumstances' and do not permit it at all for off-licences.

In Northern Ireland, a different system of licensing exists. To sell alcohol, you must apply to the county court for a liquor licence. The court can grant you a licence for up to five years. The current licensing period ends on 30 September 2027. When applying for an off-licence, you must give up an existing licence for either an off-licence or pub to the court. New licences will not be granted if the court believes that there are enough existing premises.

Safer consumption initiatives

Rising concern about binge drinking, anti-social behaviour and underage consumption has led the government and the industry to work together on initiatives aimed at promoting sensible drinking. The mid-2000s saw the introduction of a number of initiatives, including the Challenge 21 age identification scheme for retailers, public information advertising campaigns, and health information labels and advice on sensible drinking printed on labels.

The late 2000s and early 2010s saw real concern about binge and underage drinking, particularly in Scotland. The government and local authorities began looking at and introducing a range of measures to combat the problem, including tougher regulatory powers for licensing authorities and harsher penalties for retailers who break the law. In 2011 the Scottish Government introduced a ban on quantity-based discount promotions such as 'buy one, get one free' deals.

More recently, minimum prices for alcohol have been introduced in Scotland (2018), Wales (2020) and Ireland (2022). The government in Northern Ireland have legislated for the introduction of minimum alcohol prices whilst in England statutory minimum per-unit pricing remains under consideration.

Anti-smuggling measures

Illegal alcohol and tobacco products smuggled into the UK from other countries remain a major source of competition for the off-licence trade, and the government has made considerable efforts to clamp down on them over the years. A compulsory registration scheme for alcohol wholesalers came into force in April 2017.

Keeping up to date with the off-licence sector

Joining a trade association is an excellent way of staying up to date with developments in your industry. There are several trade associations representing the drinks and off-licence industries, including the British Beer and Pub Association, the Wine and Spirit Trade Association (WSTA) and the Association of Convenience Stores (ACS).

Hospitality Ulster is the trade association for Northern Ireland's licensees, including off-licences.

Subscribing to a trade journal is another good way of staying in touch with your industry. Drinks Retailing News, for example, contains features, articles and news for the industry.

Trade Shows

You can get a lot of useful information by visiting a trade show or exhibition for the drinks sector, for example the London Wine Fair .

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