Despite inflationary concerns, consumers continue to spend money in the on-premise, according to a recent report from the Bank of America Institute.
Consumer spending at bars in January increased +1% year-over-year (YoY), and increased versus fall trends, according to the report, which used aggregated card data from its own customers. The increase was significantly lower than the growth recorded in January 2024 (+26%), but well above trends for off-premise spending.
Consumer spending at “alcohol stores” declined -5% YoY in January, consistent with trends from the past two years, and below the +1% average YoY increases recorded in 2019, prior to COVID-19 pandemic, according to the report.
Off-premise spending accounted for 4.8% of Bank of America customers’ total food and beverage spending in January, down one percentage point versus 2021, when consumer trends were still heavily impacted by the pandemic and related shutdowns.
“It’s likely that some of the decline in at-home consumption can be attributed to a pivot to experiences post-pandemic, as people returned to socializing at bars and, in turn, drank less at home,” Bank of America economist Joe Wadford wrote.
Consumers participating in Dry January (or “Damp Janaury”) may also be contributing to the difference in on- versus off-premise spending, Wadford wrote, noting that “Bank of America card spending at bars and alcohol stores decreased in January for the past two years,” particularly with Gen Z consumers, who spent an average of 15% less on bev-alc in January 2025 versus January 2023.
Bank of America’s report follows a recent call-to-action by NBWA chief economist and VP of analytics Lester Jones for beer industry members to pay more attention to on-premise trends and data points beyond scan data.
Jones noted that food and beverage spending away from home has historically been below at-home spending, and fell significantly in 2020 due to on-premise closures during the COVID-19 pandemic. But once the lockdowns ended, consumers took full advantage, and spending away from home surpassed at-home spending in 2022, with the gap continuing to widen.
Another explanation for consumer shifts is the rebalancing of at-home bev-alc stockpiles after a few years of overweighted at-home consumption, according to the report.
“It’s likely that some of the decline in at-home consumption can be attributed to a pivot to experiences post-pandemic, as people returned to socializing at bars and, in turn, drank less at home,” Wadford wrote. “According to BofA Global Research, it’s also possible that consumers, with elevated deposits from stimulus funds, purchased more spirits than they could consume while bars were closed during the pandemic and are still ‘destocking’ their liquor cabinets.
“Consumers may also be thinking with their wallets when it comes to alcohol, purchasing smaller portions and consuming less alcohol, especially as they prioritize spending on experiences and make room for the rising prices of necessity items like groceries,” he added.
Bev-alc price increases have remained “comparatively similar” over the last three years, with bev-alc away from home recording about a +12% price increase from January 2019 to January 2025, according to the report, citing Consumer Price Index (CPI) data from the Bureau of Labor Statistics (BLS). Meanwhile, food at home prices (e.g. groceries) have increased +29% in the six-year period.
“Given that grocery prices are rising again, in our view, it’s likely that the price incentive to economize alcohol consumption may remain for the time being,” Wadford wrote.
If price increases are a factor for consumers, it could disproportionately affect beer, which has led CPI increases across bev-alc for more than a year.
In January, beer inflation outpaced the total bev-alc industry and other bev-alc categories (wine and spirits) both at home and away from home. Beer at home increased +1.8% (total bev-alc at home +0.8%), while beer away from home increased +3.1% (total bev-alc away from home +2.1%).
Additionally, through the first four weeks of 2025, every beer segment except for domestic super premium recorded an increase in average case price YoY, with the overall category recording an average increase of +$0.63, to $30.56 per case in Circana-tracked off-premise channels for the four-week period ending January 26.
Baby Boomers Lead On-Premise Bev-Alc Spending Growth
Among Bank of America card users, Baby Boomers recorded the largest increase in spending at bars (+4% YoY in January), according to the report. The growth of Baby Boomer spending at bars has remained above any other generation since at least January 2023, and has been accelerating since the end of 2024. The generation is also the only one that’s spending has remained growth for the full two-year period.
Generation X was the only other generation to record a YoY increase in spending at bars in January (+1%), after spending contracted throughout most of 2024.
“Additionally, younger generations are spending more of their ‘going out’ budgets at restaurants, while Baby Boomers are more likely to head to the bar,” Wadford wrote. “Within total restaurant spending, Gen Z and millennials have a higher share of bar spend, but this share has declined YoY. Conversely, while Baby Boomers’ bar spending makes up a lower share of the total, this share has increased in each of the past three years, although there has been some slowdown in the past year.
“In our view, it could be that younger generations are heading to the bar less as they take on more family and financial responsibilities,” he continued. “Meanwhile, Baby Boomers, the youngest of whom are 59, may be approaching retirement, or are already retired, and are enjoying more well-earned downtime.”
Note, Bank of America did not include what percentage of its users fall into each generational group, or how that may skew data versus overall consumer spend beyond the bank’s users.