The outlook for the low and no alcohol category looks positive for 2025, although research from Heineken shows there are still some hurdles to overcome.
Despite the growing opportunity and potential scale of the low and no alcohol category, new research into drinking habits from Heineken 0.0 in collaboration with University of Oxford Professor Charles Spence has revealed that in some situations social pressure is still a barrier to choice and consumption.
An early leader in the low and no alcohol category, HEINEKEN has been investing and innovating since 2017 to fuel increasing demand for alcohol free alternatives, and the segment now accounts for over four per cent of HEINEKEN’s portfolio, with notable growth in several key markets. In Europe, as well as in the United States and Brazil, Heineken 0.0 and Sol 0.0 are gaining significant traction.
This new study undertaken by Charles Spence, Professor of Experimental Psychology at the University of Oxford and Heineken 0.0, surveying 11,842 adults across five developed non-alcohol beer markets UK, USA, Spain, Japan (over the legal drinking age up to 75 years old), and Brazil (18 – 65 years old), found that despite the rising acceptance of low and non-alcoholic beverages, certain demographics report they feel societal pressure or are being questioned when choosing alcohol-free options.
Within the surveyed group, Gen-Z (legal drinking age to 26 years old) experiences the highest levels of societal expectations around alcohol consumption, with more than one in three reporting to have felt pressure to drink alcohol in some social situations.
The study shows that 21 per cent of Gen Z say they have concealed drinking low and no alcohol versions of alcoholic beverages because of social pressures. About 38 per cent of Gen Z men say they would be willing to drink low and no alcohol versions of alcoholic drinks, but only if their friends do too.
If and when Gen Z men choose to drink a low or no alcohol version of alcoholic drinks, 29 per cent feel they need to explain and justify their choice of drink and even feel like “outsiders” for doing so.
When it comes to moderation, there is a gap in what people say versus what they do – 51 per cent of people have ended up drinking alcohol when they said they wouldn’t, which could be due to social pressure.
Joanna Price, Chief Corporate Affairs Officer HEINEKEN, said, "As the global leader in the low and no alcohol beverage category for almost a decade, HEINEKEN is uniquely positioned to both predict and respond to consumer needs.
"Our research shows that the acceptability of 0.0 beer is at an all-time high. However, social stigmas still hinder our vision that everyone should always have a choice and should not be held back from choosing 0.0. Through campaigns like ‘Heineken® 0.0 Reasons Needed,’ we are committed to empowering responsible consumption and fostering a culture of moderation.
"Three years into our Brew a Better World 2030 strategy, our focus on consumer empowerment is stronger than ever. By offering 0.0 beer options, delivering excellent taste, and tackling social stigmas, we are redefining choice.
"Looking ahead to 2025, our ambition is to ensure that no-alcohol options are available for one strategic brand in key markets covering 90 per cent of our business."
Household spending on take-home groceries hit a record high this Christmas at £460 on average, according to the latest data from Kantar. Overall take-home sales at the grocers rose by 2.1 per cent over the four weeks to 29 December compared with last year.
Fraser McKevitt, head of retail and consumer insight at Kantar, says, “It was a solid Christmas at the supermarkets with sales surpassing £13 billion during the four weeks of December for the first time ever, showing people were clearly in the mood to celebrate and spend.
"However, despite the festive cheer, grocery price inflation has ticked up to 3.7 per cent, its highest level since March 2024.
“In contrast to reports of disappointing footfall across the rest of the high street, it was a very different story in the world of grocery. The average household made nearly 17 separate shopping trips this December, delivering the busiest month for the retailers since the pre-lockdown rush in March 2020.
"As anticipated, Monday 23 December was the most popular shopping day of the year, with sales a whopping 30 per cent higher than any other day during 2024.”
People were also willing to splash out that little bit more than usual, as sales growth for branded goods accelerated to 4.2 per cent, while premium own-label lines jumped by 14.6 per cent. The latter now account for a record 7.0 per cent of all sales, as nine in 10 households bought at least one of these products in December.
Sparkling wine and champagne were the stars of the festive drinks trolley, achieving sales growth of 4.4 per cent at a total of £187 million across the month. There was enjoyment in moderation too, as 11 per cent of the population bought a no or low alcohol drink, up from under 10% last year.
The category data reveals some interesting splits between how younger and older shoppers prefer to indulge.
McKevitt adds, “We’ve all got our own festive favourites, but it seems that age differences come into play too. Under 45s are far more likely to pick up a sausage roll, and they also go for a slightly more mediterranean spin, being the most likely to reach for panettone as well as antipasti and party food as part of their Christmas shopping.
"Meanwhile over 45s account for the majority of Christmas cake and fortified wine sales. The seasonal biscuit, however, knows no bounds appealing across the generations.”
Britain's largest grocer Tesco saw growth across its convenience, superstore and online channels contributing to a 5.0 per cent increase in sales over the 12 weeks to 29 December.
Sainsbury’s achieved its highest share since December 2019 at 16.0 per cent thanks to sales growth which outpaced the market at 3.5 per cent. Morrisons sales rose by 0.4 per cent with its share standing at 8.6 per cent. Asda now holds 12.5 per cent of the market.
McKevitt adds, “More people chose to do some of their Christmas grocery shopping online this year with 5.6 million households opting for delivery or click and collect services on at least one occasion. Online spending for the month reached a record £1.6 billion. This saw Ocado boost its sales by 9.6 per cent over the 12 weeks, taking its overall share to 1.8 per cent.”
Discount retailers Lidl and Aldi achieved their highest ever Christmas shares at 7.3 per cent and 10.0 per cent respectively. Lidl secured the fastest footfall growth of any retailer as spending through its tills increased by 6.6 per cent. Aldi’s sales were up 2.9 per cent, as it attracted an additional 315,000 customers to its stores.
Waitrose market share remained at 4.6 per cent with spending increasing by 2.1 per cent. Iceland’s sales rose by 1.0 per cent giving the frozen food specialist a 2.3 per cent share. Convenience retailer Co-op’s portion of the market is now 5.3 per cent.
Share of symbols and independents saw a slight dip and is at 1.3 per cent.
Outside of the grocers, food and drink spending at M&S increased by 8.7 per cent, driven by strong performance in its core fresh and chilled range (9 per cent higher) and ambient lines (11 per cent greater) across the 12 weeks.
Food sales fared better over the Christmas period, ticking up slightly from the previous year, amid overall sluggish sales as crucial "golden quarter" failed to give 2024 the send-off retailers were hoping for, shows latest data.
According to figures released by British Retail Consortium (BRC) today (6), UK total retail sales increased by 0.7 per cent with food growth rising by 3.3 per cent and the non-food declining by 1.5 per cent for the year.
For the three months to December (the Golden Quarter), sales growth was 0.4 per cent year on year.
Food sales increased by 1.7 per cent year on year in December, against a growth of 6.3 per cent in December 2023. This was below the 3-month average growth of 2.1 per cent and below the 12-month average growth of 3.3 per cent.
Non-Food sales increased by 4.4 per cent year on year in December, against a decline of 2.1 per cent in December 2023. This was above the 3-month average decline of 1.1 per cent and above the 12-month average decline of 1.5 per cent.
Helen Dickinson, Chief Executive at the British Retail Consortium, said, "Following a challenging year marked by weak consumer confidence and difficult economic conditions, the crucial ‘golden quarter’ failed to give 2024 the send-off retailers were hoping for.
"Non-food was particularly hard-hit, with sales contracting from the previous year.
"Food sales fared better over the Christmas period, ticking up slightly from the previous year, meanwhile beauty products, jewellery and electricals made a strong showing under the tree this year.
“While we project sales growth to average 1.2 per cent in 2025, this is below the projected shop price inflation of 1.8 per cent. This means volumes are likely to fall this year, all while the regulatory and tax burden on retailers will increase costs by £7bn from rising National Insurance Contributions, increasing national living wage, confirmed in the Budget, and new packaging levies.
"With little hope of covering these costs through higher sales, retailers will likely push up prices and cut investment in stores and jobs, harming our high streets and the communities that rely on them.
"Government must find ways to mitigate this, so that retailers can invest more in growth and jobs, starting with its planned business rates reform where it must ensure that no shop ends up paying higher rates than they do already.”
Commenting on food and drink sector performance, Sarah Bradbury, CEO, IGD, said, "Early results for Christmas trading show some positive signs with both grocery sales and volumes up compared to last December, although the rate of growth has slowed compared to 2023.
"The festive season usually leads to a lift in shopper confidence; December 2024 was no different, with wage growth outstripping inflation, contributing to the uptick this year.
"As is often the case, some shoppers opted to treat themselves by trading-up with some product choices this Christmas.
"However, with the economic outlook for 2025 remaining relatively weak, and with households facing the prospect of rising bills, this shopper behaviour could be short-lived.”
More businesses are expecting to raise prices while fewer firms have increased investment plans, shows a recent survey reflecting the sentiment among businesses regarding upcoming changes this year.
In the largest poll of business sentiment since October’s Budget, the BCC’s Quarterly Economic Survey, shows concern about tax, including national insurance, has spiked.
Following the Chancellor’s autumn statement, 63 per cent of firms cited it as a worry (compared with 48 per cent in Q3), the highest level on record. Concern about inflation and interest rates remains at similar levels to Q3.
Business confidence has declined significantly with 49 per cent of responding companies expecting their turnover to increase over the next twelve months (compared with 56 per cent in Q3). Confidence levels are lowest in the retail and hospitality sectors (39 per cent and 42 per cent respectively).
The survey was conducted after the Budget, with the fieldwork carried out between Nov 11 and Dec 9. The data from over 4,800 businesses across the UK (91 per cent of whom are SMEs – fewer than 250 employees) also shows that the majority of firms are expecting to raise prices.
Following the Budget, concern about taxation is now cited by 63 per cent of responding firms, up from 48 per cent in Q3. This is the highest level of tax concern since 2017, when the BCC started asking this question. The levels in certain sectors are higher, with 72 per cent of production and manufacturing firms, and 68 per cent of construction and engineering businesses raising tax as a concern.
There has been a significant drop in business confidence since the Chancellor’s statement. Only 49 per cent of firms say they expect their turnover to increase in the next twelve months, down from 56 per cent in Q3. This is the lowest figure since the aftermath of the mini budget in late 2022.
A fifth (21 per cent) of businesses expect turnover to worsen, up from 15 per cent in Q3, and 30 per cent expect no change.
Profitability confidence has also been hit, 40 per cent of firms expect profits to increase over the next year (48 per cent in Q3), while 32 per cent of businesses expect them to fall.
Over half (55 per cent) of responding firms say they expect to raise their prices in the next three months, compared with 39 per cent in Q3. While 43 per cent of businesses expect prices to stay the same, and only 2 per cent expecting to decrease.
Labour continues to be the main cost pressure for firms – but the issue is now raised by 75 per cent of businesses, up from 66 per cent in Q3. The issue is most significant for the hospitality sector with 87 per cent reporting it as a challenge, followed by 84 per cent of firms in the transport and logistics sector.
Only 20 per cent of businesses say they have increased investment plans over the last quarter, down from 23 per cent in Q3. 24 per cent of firms say they have cut back investment plans, a steep rise from the Q3 figure of 18 per cent. 56 per cent of businesses say their plans have remained the same.
The issue is more marked in certain sectors, with 42 per cent of retail and hospitality firms reporting a scaling back of investment and 30 per cent of manufacturers.
The percentage of respondents reporting increased domestic sales has fallen again to 32 per cent, compared to 35 per cent in Q3. 42 per cent reported no change and 26 per cent of firms said they had seen a decrease in sales.
Retailers were the most likely to have seen a fall in sales (36 per cent) followed by manufacturers (33 per cent).
Shevaun Haviland, Director General of the British Chambers of Commerce said, "The worrying reverberations of the Budget are clear to see in our survey data. Businesses confidence has slumped in a pressure cooker of rising costs and taxes.
“Firms of all shapes and sizes are telling us the national insurance hike is particularly damaging. Businesses are already cutting back on investment and say they will have to put up prices in the coming months.
“The Government is rightly coming up with long-term strategies on industry, infrastructure and trade. But those plans won’t help businesses struggling now.
“Business stands ready to work in partnership to make the proposed Employment Rights legislation work for all, but the current plans will add further costs on firms.
“To help business we need to see quick action in three specific areas. Firstly, ministers should accelerate business rate reform to create a system that incentives investment.
“We also need the Government to speed up infrastructure investment, to help SMEs in supply chains across the country. Finally, it’s crucial to support exports, prioritising a better trading deal with the European Union.
“Without urgent Government action to ease the pain on businesses, the challenging economic landscape will get worse before it gets better.”
David Bharier, Head of Research at the British Chambers of Commerce said, “This dataset is a clear signal that business sentiment has been significantly impacted following recent policy announcements, notably national insurance increases. Taxation is now by far the biggest concern, cited by 63% of businesses.
“Confidence has now dipped to 2022 levels, with less than half of firms expecting improved turnover over the next year and over a fifth now expecting it to worsen.
“Faced with rising costs, our survey paints a difficult picture and shows businesses are having to make some very difficult decisions. Many tell us they expect to push up prices and cut back on investment and we expect this to lead to a low or no-growth economic climate in the coming months.”
UK stores saw record sales during Christmas this year with shoppers were seen flocking to bricks and mortar stores spending £14.6 billion, majorly focusing on deals and discounts, shows recent data released today (7).
According to NIQ Christmas 2024 Flash report, after a slow start, it was the biggest ever Christmas over the three weeks to Dec 28 2024 with shoppers spending £14.6 billion, a growth of 3 per cent vs the previous year.
Over the full 4 weeks the market grew by 3.2 per cent.
The highest level of promotions in three years this Christmas with 27 per cent of sales purchased on deal driven by brands at 37 per cent.
Shoppers searched out savings at bricks and mortar stores with visits to store up by 8 per cent. This came at the expense of online with online share falling to 11.9 per cent from 12.5 per cent a year ago.
Discounters were fast growing with market share up to 16.3 per cent up from 15.8 per cent a year ago.
This comes a day after discounter Aldi reported its "best Christmas ever" figure.
Aldi’s total sales rose 3.4 per cent year-on-year, reaching over £1.6bn. While this is a notable achievement, Lidl again outpaced Aldi with a 7 per cent growth during the same period due to its lower prices on key products.
Aldi’s success was fueled by customers trading up to its premium own-label products, with its Specially Selected range experiencing a 12 per cent increase in sales year-on-year.
Aldi responded to evolving consumer preferences by expanding this range to include less traditional meats like goose and duck and seafood dishes like lobster and salmon.
As pointed out by Aliyah Siddika, Retail Analyst at GlobalData, Aldi also successfully broadened its vegan and vegetarian options during the holiday season, appealing to diverse consumers with varying dietary needs and preferences.
"This expansion allowed customers to conveniently cater to all guests for parties or gatherings in one shopping trip. Aldi also introduced new products into its Specially Selected party food range, with wagyu appetisers, bao buns, and prawn toast.
"The Specially Selected range appealed to customers seeking high-quality, innovative products at affordable prices, as these premium products remained cheaper than similar products from its mid-market competitors."
Additionally, Aldi effectively marketed its British products, recognising the increasing demand for these food items during the holiday season.
Aldi experienced robust sales of its British products, including 350,000 fresh British turkeys, over 400 tonnes of British beef, and nearly three million British Brussels sprouts. By focusing on product sourcing throughout the year, Aldi can continue to attract customers and expand its customer base by enhancing perceptions of product quality.
The majority of UK households are heading into 2025 feeling financially secure, but more people think the health of the economy is worsening than improving, a recent report has shown.According to KPMG UK’s Consumer Pulse survey, nearly three times more people feel secure (fifty-seven percent) than insecure (twenty-one percent) about their financial situation.
While the picture for financial security is largely positive, consumer opinion regarding the health of the UK economy was more mixed – with four in ten consumers saying the economy is worsening, compared to a quarter saying it’s improving.
Pessimism about the UK economy is highest among two-thirds of those aged sixty-five and over, with those aged 25-34 the most optimistic. Regionally, London is the most upbeat, with the North East the most downbeat about the economy.
A wage rise would be the most likely reason to increase an individual’s spending beyond 2024’s levels.
A third of consumers say that retailer promotional events could convince them to part with more money during the course of the year, with a quarter saying improved loyalty scheme prices would.
Reflecting upon the findings, Linda Ellett, head of consumer, retail and leisure for KPMG UK, said, “Whether due to confidence in their ability to spend or their ability to manage household bills, it is positive news that the majority of UK households are heading into 2025 feeling financially secure.
“Despite four in ten people saying the UK economy is worsening, a higher amount than those thinking it is improving, planned spending on big ticket items over the next twelve months looks healthy. Whether that spend comes to fruition will depend on a range of factors, including continued reduction in interest rates and whether perception about economic worsening becomes a reality in the form of increased job insecurity.”
Comparing their spending in the last three months (Sept, Oct, Nov) to the previous (June, July, Aug), groceries was the number one category for those spending more money while eating out was the activity consumers most commonly spent less money on.
A quarter of consumers reported buying promotional or discounted items more over the last three months, while half of consumers said they bought big ticket items – most commonly on a holiday, followed by household appliances.
Price was the top purchasing driver for both everyday purchases and one-off higher cost items.
Ellett added, “Promotional periods and the value consumers place on loyalty pricing throughout the year have all demonstrated that shoppers remain savvy when it comes to searching out better deals.
"This will continue in 2025 and our research shows that up to a third of consumers may increase their overall spending levels if retailer offers are sufficiently appealing to them.
"Retailers will be looking to capitalise on this by using customer data and AI to ensure offer targeting is increasingly personalised in the coming twelve months.”