Ontario liquor sales remain strong

Customers choosing to drink at home over bar

Tuesday, April 7th, 2009

Since the economic downturn began, many Ontarians have had less money to spend and only necessary items " like alcohol " are selling strongly.

“We ended up coming through the holiday sales period in pretty good shape, especially compared to the broader retail sphere,” Chris Layton, media relations co-ordinator for the Liquor Control Board of Ontario, said.

“We ended up [with sales] about four per cent up this December compared to December of 2007.”

With the economy in its worse condition since the Great Depression, many are quick to attribute the LCBO’s sudden success to a human tendency of resorting to alcohol to help overcome hard times.

Though this may explain some of the LCBO’s recent success, according to Layton, that is only one part of the mix.

“We wouldn’t say alcohol is totally recession proof, but I think we can call it recession resistant,” he said.

“Essentially what happens is people will change their buying patterns, so they’ll choose to stay home more than going out, which still means you’re getting more traffic in the LCBO.”

With the tradition of drinking in residential spaces on the rise, bars across London have had to swallow some bitter hardships.

“At the end of the day our sales are down because there is a recession and that’s across the board,” Ron Scarfone, general manager of Joe Kool’s, said. “I don’t know that you could talk to any bar in the city that won’t tell you numbers are down.”

With served drinks costing significantly more than the same product from the liquor store, it is not surprising that many university students opt to spend the majority of their drinking time in private.

“I spend a lot more money at the liquor store. Most of my drinking is done outside the bar,” Daniel Burns, a fourth-year Western biology student, said. “I think that if booze was cheaper at the bar I’d be spending it there.”

Though the trend of drinking before going out certainly allocates more money to the liquor store and away from the bar, this trend is considered popular primarily among younger drinkers, who only make up a small portion of LCBO earnings.

“The impact of the economy was probably most noticeable on our premium products,” Layton said. “That indicates to us that there has been some shifting as people try and stretch their dollar.

“The reason why our sales are increasing is because the [overall] dollar sales might be higher, but people are stretching the dollars more and buying more liquor for less money.”

According to Scarfone, however, the LCBO’s recent success is part of a larger generational shift away from beer and towards spirits, and has nothing to do with the economy.

“Alcohol sales are not up, spirit sales are up, because beer sales are declining. That’s not something that’s only been going on for a year but rather several years,” he said.

Burns agreed, explaining the economic downturn has had little impact on his drinking habits.

“There are certainly brands I drink with certain people that are more expensive,” he said. “The recession hasn’t affected it all that much.”

The success of a government-regulated business at a time when most others are struggling has caused some fear over price hikes. Layton, however, is confident the stagnant economy will only cause an assured stability in alcohol pricing.

“The suppliers who give us a quote when we buy the products are watching the economy very carefully,” he said.

“We’ve seen pretty fair stability in the price of alcohol over the past few years and that’s because it’s such a competitive business between suppliers that they have to maintain price stability.”

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