BC liquor licensees have good reason to feel nervous about the current state of Canada’s economy and what the future may bring. In May, Canada’s Consumer Price Index rose 7.7% while BC’s Consumer Price Index told a similar tale of across-the-board cost increases, including a 7.2% increase in alcoholic beverage costs.
It’s difficult to predict what the future may hold, but if history has taught us anything about alcohol consumption during inflation, it is this: all types of liquor licenses in BC will be affected, though probably some more than others. As reported in Forbes article “Are Alcoholic Beverages Recession and Inflation Resistant?”, Goldman Sachs analysis suggests that during economic downturns “consumers tend to drink at home where it is cheaper versus at a bar or restaurant and trade down to more affordable products”.
Beer may experience a resurgence in popularity while premium spirits and ready-to-drink cocktails, which have been trending upward over the past several years, may see that trend disrupted. As pointed out in the article “consumers have historically gone beyond trading down to cheaper liquor and moved to more beer consumption since it carries a lower cost per serving.”
All BC liquor licensees will be affected by inflation. Liquor stores may feel less impact than restaurants and bars, but that doesn’t mean their liquor license is a license to print money.
Do you know what your customers are drinking? Now is the time to find out. Whether you own a private liquor store or wine store, restaurant or bar, taking a close look at category sales month-to-month compared to previous years can help you discover avenues for profit. Thrive Liquor & Cannabis Advisors, BC’s most trusted liquor consultants, provides operations audits. An audit can help ensure that you have an inventory that reflects consumers’ inflation-period spending habits.Book a Free 30-Minute Consultation Today!