Every Friday night, from Perth to Parramatta, millions of Australians knock-off work with a thirst that only their favourite drink can quench. Whether it’s a schooner from the local, a bottle of merlot shared on the balcony or – quite a bit later in the evening – a shot of tequila before striding to the dance floor, it is no secret that the majority of Australians enjoy a drink in their free time.
At Pocketbook we were curious to see exactly how much Australians were spending on booze.
While the consequences of excessive alcohol consumption can be tragic and are known to lead to wider societal issues (according to Australian Institute of Criminology’s 2013 report The societal costs of alcohol misuse in Australia, alcohol-related problems cost society more than an estimated $14 billion), we wanted to explore how our drinking culture was hitting Australians’ hip pocket.
By analysing the spending habits of Pocketbook’s 250,000 users, our aim was to provide insights into the trends and patterns associated with alcohol consumption in Australia, which could in turn be used to predict future spending. As always, we analysed the data in aggregate and with identifiable information removed.
During our research, we split spending behaviours into three different categories: Big Box retailers (Dan Murphy’s, First Choice, BWS etc.), Small Box retailers (smaller wine and liquor shops as well as specific online retailers such as Jimmy Brings and Cellarmasters) and Bars/Pubs. With a final aggregate sample size of 128,192, we reviewed spending habits for 2014, 2015 and 2016.
Our investigations began with a few common sense hypotheses like Australians spend more on alcohol over Australia Day than they would over the course of a normal weekend (save the sarcasm – we told you these were common sense hypotheses!).
We also hypothesised that Australians were spending more on alcohol year-on-year, essentially in parallel with general consumer spending trends.
While some of our hypotheses were spot on, you might be surprised at the findings that ran counter to our predictions.
We’ll leave a deeper analysis of these trends, along with the industry context, to others, but here’s some of the key findings from our data:
Now for the numbers…
Alcohol Spending Analysis
We conducted a study into Australian spending on alcohol over the past 3 years with specific focus on December to January festive season spending, and also for the Australia Day period over 2014, 2015 and 2016.
As part of the study, we looked at spending for the following alcohol retailers:
- Dan Murphy’s
- IGA Liquor
- Woolworths Liquor
- Vintage Cellars
Small-box retailers both online and offline, using keywords:
- Other bottle shops
- Other liquor shops
- Other wine shops
- Specific online retailers such as (Vinomofo, Cellarmasters, Jimmy Brings etc)
Bars and pubs including suburban hotels, pubs, bars.
The sample size for the study is 128,192 people.
Hypothesis 1: Australians are spending more year-on-year on alcohol.
Australian spending on alcohol has remained relatively steady yearly. We looked at monthly average spending per person for the past 3 years.
- 2013-14 – $113.03
- 2014-15 – $121.43
- 2015-16 – $124.45
While this is the case, the makeup of the spend across types of retailers has only shifted slightly – with small-box stores declining;
- 2013-14: 43% Big-box , 33% Small-box, 24% Pubs/bars
- 2014 -15: 45% Big-box , 30% Small-box, 25% Pubs/bars
- 2015 -16: 45% Big-box , 29% Small-box, 26% Pubs/bars
- Big-box is almost half of the spending in dollar terms
- Small-box has shifted 4% less over the last 3 years (Could this be because people going out more? Big retailers taking over share? – Further research is recommended).
Of the Big Box group, the following are the best The best performing liquor stores Liquor Stores:
- Dan Murphy with a market share of 45.17% (down from 50.13% in 2014)
- Liquorland with a market share of 23.28% (up from 11.28% in 2014)
- BWS with a market share of 22.95% (down from 27.19% in 2014)
Note: The rest of the big retailers growth was relatively stable.
One of the reasons why Big Box group might be taking over is due to the discounts they’d likely offer over smaller vendors. An early evidence of this is that for the year Dec 2014 to Nov 2015, the average transaction amount is 25% higher at small-box stores smaller retailers. Further analysis is recommended based on like-for-like product price comparisons.
- Big-box – $44.73 average transaction size
- Small-box – $56.16 average transaction size
- Bars / Pubs – $36.64 average transaction size
The average transaction size appears to line up well with the average expected prices for 1x case of beer, 1x bottle of spirits or 2-3x bottles of wine.
Hypothesis 2: Australians spend more the Australia day period versus the average weekend
During the Australia day period – there is an overwhelming amount of people purchasing alcohol compared to an average weekend. The amount of people increase in amount of people purchasing alcohol over Australia day is between 3-4 times the typical weekend.
- 2014 – 3.06x
- 2015 – 3.79x
- 2016 – 4.20x
We then looked at how the spending on Australia Bay varies by retailers types. The makeup in spending also changes during the Australia Day period versus a regular weekend for 2014-15.
- Big Box – Down 48.65% to 43.81% on Australia Day.
- Small Box – Up 28.08% to 35.24% on Australia Day.
- Pubs/bars – Down 23.27% to 20.94% on Australia Day.
- Less people are spending at Big Box retailers and more people spending at Small Box retailers.
Despite the huge increase of people spending on alcohol, the average transaction size remains consistent to the average weekend, so the typical purchase is very much still 1x case of beer, 1x bottle of spirits or 2-3x bottles of wine:
- 2014 – $47.87 Australia Day, $48.16 Regular Weekend
- 2015 – $48.52 Australia Day, $45.48 Regular Weekend
- 2016 -$43.43 Australia Day, $44.69 Regular Weekend
Hypothesis 3: Australians spend much more on alcohol over the December / January festive season.
During the December period there is huge jump in spending followed by a steep decline in January and February. This can be seen by looking at the total average monthly spend per person. This is an expected decline as December is the festive season.
|Average per person spend Dec to Feb||2014 (Dec 13)||2015 (Dec 14)||2016 (Dec 15)|
We can see here that the average spend per person is much higher during the month of the December period:
- 2014 (Dec 13) – $135.85 – 22.4% above monthly average (excluding Dec)
- 2015 (Dec 14) – $150.37 – 26.58% above monthly average (excluding Dec)
- 2016 (Dec 15) – $153.30 – 28.96% above monthly average (excluding Dec)
Similarly, there is a reduction of monthly spend in February. People are likely putting into effect their new-year’s resolutions (ie cutting down alcohol consumption or saving money) – more research needed.
- 2014 – $102.50 – 8.20% below monthly average (excluding Dec)
- 2015 – $109.11 – 8.88% below monthly average (excluding Dec)
- 2016 – $116.50 – 2.04% below monthly average (excluding Dec)
Finally, we looked at the drop-off for specific store types. We noticed that the bigger the store (ie the more planned purchase) the bigger the drop-off between December to February. This means the Big Box stores drop off the most and bars the least.
- Big box – 29%
- Small box – 13%
- Pubs/bars – 10%
|Average per person spend December – February:||Month||2014 (Dec 13)||2015 (Dec 14)||2016 (Dec 15)||3 year average|
We can see that the the biggest drop off in per person spend is at big box retailers. The smallest drop-off is for pubs/bars.
Pocketbook Personal Spending Takeaways.
The above findings should give you a leg up when it comes to how you spend your money on alcohol. And here are three additional key takeaways:
Wishing you a happy Feb(fast)!