A drop in promotional activity has been blamed for a slump in supermarket sales of Britain’s number one lager brand.
Volume sales of Stella Artois - which cut its abv from 5% to 4.8% earlier this year - have crashed 16.5% year-on-year in multiples, while value has fallen 7% to £258.3m [SymphonyIRI 52w/e 14 April 2012].
Overall supermarket sales of lager dropped 5.5% by volume, linked to price hikes as value rose 2.8%.
With Stella Cidre recording sales of £36m in the supermarkets in its first year, there has been speculation that it had damaged the mother brand. But AB InBev, which announced in its Q1 results this week that UK beer volumes, excluding cider, had fallen 9.7%, said it had seen only a “very low level” of cannibalisation.
And the key reason for the drop looks to be a change in promotional strategy. Symphony IRI data has revealed the proportion of Artois sold on deal has dropped from an average of around 80% in Q1 2011 to about 60% in Q1 this year. The typical saving offered by Artois deals - already below the lager category average over the past 12 months - has dropped even further this year. In March, deals on Artois offered a typical saving of 10.7% compared with a category average of 16.2%.
The reduction in abv - believed by many to be a tactic to cut the duty burden - suggested margins had become thin, said Mintel drinks analyst Jonny Forsyth, adding that AB InBev may have decided long-term discounting had become unsustainable.
The brewer said it was investing “significantly” in the Stella Artois family through advertising.