Consumers Flock to On-Premise Locations to Celebrate Events
Major U.S. events and celebrations in May led to large upticks in on-premise visits, according to the latest consumer survey from CGA, a market research firm that tracks on-premise sales.
More than one-third (34%) of adults visited bars and restaurants for Mother’s Day, while nearly a quarter (22.7%) visited for Cinco de Mayo. Meanwhile, 14% of respondents said they ventured out for the Kentucky Derby on May 1 — more than double the amount who visited for the 2019 Derby (6%).
Local restaurants, neighborhood bars, and casual dining chains were the most popular venues for these events.
Those visiting are also spending more. More than two-in-five consumers told CGA they spent more this year than in past visits for Cinco de Mayo (47.6%), the Kentucky Derby (53.1%) and Mother’s Day (43.2%). Mother’s Day posted the largest uplift in value of sales (+67%), followed by Cinco de Mayo (+9%). Kentucky Derby value of sales remained flat. On all occasions, young adults were more likely to increase their spending than older patrons.
The trends for May events, along with many states lifting COVID-19 restrictions and increasing capacity limits, suggest continued increases in on-premise sales for this summer’s upcoming holidays, including Memorial Day, Father’s Day, Independence Day, and Labor Day.
“After months of restrictions, many consumers are ready to celebrate U.S. public holidays and events in a big way in 2021,” Alexandra Martin, operator and analytics director at CGA, said in a release. “On-premise operators and beverage brands have a great opportunity to capitalize on pent-up demand and position themselves at the heart of big occasions.”
Labor Day is predicted to see the most on-premise visitors, as nearly a quarter (23.5%) of consumers surveyed said they plan to celebrate Labor Day in bars and restaurants. Nearly a fifth (18.4%) said they would celebrate Independence Day in on-premise establishments, followed by Memorial Day (18%).
As a benchmark, CGA CLIP data from 2019 showed Father’s Day generating a 54% increase in sales by value, followed by Labor Day (+27%) and Memorial Day (+15%).
“Our research shows that operators and suppliers have many effective promotional levers to pull on event occasions,” Martin said. “It will be crucial to work together on special offers, events and other strategies if they are both to make the most of these exciting opportunities and position themselves as go-to partners for celebrations.”
Two-in-five (39%) consumers surveyed said they would be encouraged to visit by special drink offers. They were also motivated to go to locations with drink offerings (32.7%), special events (31.6%) and live entertainment (27%).
Velocity +155% Higher Than Same Week a Year Ago
Average outlet sales were up +12% for the week ending May 15 compared to the week before, according to CGA’s COVID-19 On-Premise Impact Report published last week. It is the fourth consecutive week of growth across the U.S.
Mother’s Day (May 9) and Cinco de Mayo (May 5) helped the upward trends, along with states governments easing dining restrictions, with 100% of states having restaurants open indoors and 98% of states having bars open indoors, with some capacity limits still standing.
Compared to the same time last year, velocity is up +155%. It should be noted that the comparable week last year (week ending May 16, 2020) was one of the worst periods for on-premise declines, according to CGA.
“The channel is experiencing positive movement as re-openings are continuing at pace,” Matthew Crompton, CGA’s client solutions director, Americas, said in a release. “The summer months pose an exciting opportunity and with many festivals also announcing their line-ups, and capacities in stadiums increasing, consumers are eager to continue visiting the on-premise.”
Of the key states observed, New York saw the greatest sales velocity increase compared to the week before (+17%), followed by Illinois (+16%), Texas (+13%) and California (+11%). Florida posted the smallest increase, but still trended upward at +8%.
When comparing city-specific sales velocity over the week, San Francisco performed the best (+19%), followed by Houston (+18%), New York City (+17%), Dallas (+17%), Los Angeles (+16%) and Austin (+15%).
California, New York, and Illinois each recorded sales velocity increases over 200% compared to the same week in 2020 (+253%, +219% and +210% respectively). California’s lead in year-to-year sales for the week is likely due to the state’s tighter restrictions in May 2020. Florida sales velocity was up +138% year-over-year, followed by Texas at +114%.