According to a survey by Verdict Research, published today, supermarkets such as Tesco will in future benefit from better marketing and buying power and will continue to win market share from specialists such as Thresher and Victoria Wine.
Traditional off-licences have seen their share of the take-home market tumble from 40 per cent in 1990 to 31 per cent today. Yet the market itself is booming.
The total drinks market has grown by just over 48 per cent since 1988, while the off-trade sector has expanded at nearly twice that rate, by 82 per cent.
If anything, the Verdict Survey says, the trend is "picking up speed". By the end of this year, take-home drink sales will be worth pounds 8.5bn, equivalent to pounds 400 for every household in the country. This compares with almost pounds 4.7bn eight years ago, when take-home accounted for a quarter of all drink sales. Today take-home sales are 31 per cent of the total.
Tesco has led the charge for the supermarkets, growing its share of the drinks market by nearly a third in the past four years alone. Tesco now has 13.9 per cent of the national drinks market, overtaking the previous leader, Sainsbury's, which has 12 per cent.
The other winner has been Safeway, which has grown its share by a fifth, while Asda has grown by a more modest 5 per cent.
This growth has left the specialist drinks retailers with just two champions of any size, Thresher and Victoria Wine. Both are around four times the size of their closest rival, Greenalls.
The Verdict survey says there has already been considerable consolidation in the sector and there is little scope left for more mergers.
Specialists have reacted by going up market in an attempt to use their wine credentials to differentiate themselves from the grocers. Some of them have also embraced the convenience store concept, Thresher through its Huttons chain and Greenalls through Greenalls Food Stores.
In the specialist sector, Thresher, the leading off-licence chain, has streamlined its business and market share has fallen from 9.1 per four years ago to 7.9 per cent today. Its closest rival, Victoria Wine, has moved in the opposite direction, growing its share from 5.3 per cent to 7.1 per cent.
Verdict warns that there is still a big competitive challenge to UK retailers from France. "The spectre of cross-Channel trade still looms ominously over the drinks industry as a whole," it says.
Both legitimate and illicit cross-Channel drinks buying wiped an estimated pounds 4.18bn off the domestic trade last year, or 15 per cent of the total market. "Contrary to common belief, the problem is a nationwide one and by no means restricted to the South-east," Verdict says.Reuse content