As GuestMetrics reported earlier in the week, traffic trends to all three channels in on-premise deteriorated during the 4-week period ending 12/1/13, and not surprisingly, alcohol trends have also weakened:

• On-premise alcohol volumes were -3.7 percent during 3Q, improved to -2.8 percent during the recent 4 weeks ending November 3rd, but fell to -4.2 percent during the 4 weeks ending December 1st, matching their weakest level of ‘13.  In terms of the specific alcohol categories:
  • Beer:  Beer volumes were -4.9 percent in 3Q (weakest quarter of the year), improved slightly to -4.0 percent during the 4 weeks ending 11/03, but fell to -5.5 percent during the 4 weeks ending 12/01, their weakest level of any 4-week period in the year.  Comparing y/y volume growth for the last two 4-week periods, the deterioration was driven primarily by bars/clubs and casual dining:  in bars/clubs, beer volumes fell from -5.9 percent to -6.3 percent; in casual dining, fell from -4.0 percent to -6.1 percent; and in fine dining, showed a slight improvement from -2.0 percent to -1.5 percent.
  • Spirits:  Spirits volumes were -3.0 percent in 3Q (their weakest quarter of the year), improved slightly to -2.3 percent during the 4 weeks ending 11/03, but fell to -3.8 percent during the 4 weeks ending 12/01, close to their weakest level of any 4-week period in the year (only February was weaker).  Comparing y/y volume growth for the last two 4-week periods, the majority of the deterioration in spirits volumes was driven by the casual dining channel:  in bars/clubs, spirits volumes improved from -4.3 percent to -3.6 percent; in casual dining, weakened from -3.1 percent to -5.1 percent; in fine dining, showed a slight softening from +1.1 percent to +0.4 percent.
  • Wine:  Wine volumes were -1.3 percent in 3Q (weakest quarter of the year), improved slightly to -0.5 percent during the 4 weeks ending 11/03, but fell to -1.6 percent during the 4 weeks ending 12/01.  Comparing y/y volume growth for the last two 4-week periods:  in bars/clubs, wine volumes weakened from -3.7 percent to -5.3 percent (though should be noted bars/clubs are very small channel for wine, accounting for just 4 percent of wine volumes); in casual dining, weakened from -0.4 percent to -1.9 percent; in fine dining, showed a slight downtick from -0.2 percent to -0.6 percent.
• Given the observed overall retail sales and consumer discretionary spending weak in November, it will be particularly important to monitor whether there is any type of turn-around in the coming weeks as we head further into the critical holiday season.