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US wine sales jump but restaurant trade suffers

A spike in US wine sales in March has mirrored a similar trend in the UK, but the restaurant and bar industry has faced turmoil. 

Analyst group Nielsen said that US wine sales were up by 66% year-on-year in the week ending 21 March, according to a report by Wine Business, highlighting how orders rose after officials introduced restrictions on movement and social distancing guidance in the wake of the coronavirus crisis. Nielsen figures don’t cover on-trade sales, such as bars and restaurants.

CNBC reported that wine and alcohol delivery app Drizly has also seen a spike in sales, up by around 300% in recent weeks versus earlier in the year.

However, the overall situation was not so positive for the trade, given that many restaurants and bars have been forced to close. 

The National Restaurant Association has welcomed president Trump’s $2.2 trillion coronavirus relief package, known as the CARES Act, which is intended to help businesses and individuals in all economic sectors.

But, it also said, ‘Since 1 March, the industry has lost more than three million jobs and $25 billion in sales, and roughly 50% of restaurant operators anticipate having to lay off more people in April.’

While the emphasis of authorities and businesses is naturally on the immediate health of citizens and preventing the spread of Covid-19, wineries could also take a financial hit from the crisis, said a report by WineAmerica earlier this week

UK merchants also see spike in wine orders

It’s been a similar story in the UK, where wine shops and merchants have been added to a list of essential services. 

Some have reported jumps in demand that would normally only take place at Christmas.

In the grocery market, analyst group Nielsen said yesterday (1 April) that ‘massive stockpiling’ had seen 79m extra shopping trips in general in the four weeks before the government formally put restrictions on movement – at the start of last week. 

Sales of beers, wines and spirits in the so-called ‘off-trade’ were up by 58% in the week ended 21 March – the last week before the lockdown – versus the same period of 2019, Nielsen said. 

Not every merchant has been able to continue selling wine. The Wine Society ceased taking orders in order to reconfigure its warehouse, so as to protect the health of staff and meet social distancing guidance.

Its chairman, Sarah Evans, said in an email to customers yesterday (1 April), that it would ‘not compel anyone to work’, but that it ‘hopes to be in touch soon with news of a phased reopening, albeit for a reduced service’.

Other merchants have put restrictions on orders. Analyst group Wine Lister reported this week that Lea & Sandeman had raised its minimum order from £100 to £500.    

While restaurants and have sought to offer takeaway options, the on-trade sector has inevitably suffered after the government told outlets to close – in order to contain the spread of the coronavirus and prevent health services from being overwhelmed with cases.

Analyst group CGA said that restaurant sales were down by 75% in the week up to 22 March, with bar sales down 88%.

Trade group UK Hospitality announced a new online jobs portal, named HospitalityUnite, to help those affected find new or temporary work.

‘While hospitality has received vital support from the Government, the sector is collectively also playing its part in trying to mitigate the hardship that so many of our people have suffered at this time and will suffer in the weeks and months to come  – and at the same time help those parts of the economy that now need extra labour to keep the country running,’ said Kate Nicholls, chief executive of UK Hospitality.

See also: 

WineAmerica survey forecasts economic impact of Covid-19 on wineries

French vineyards begin 2020 growing season in lockdown

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