Sales of high-quality, high-margin alcohol products have grown, boosting profit.
New York, NY (PRWEB) April 04, 2014
The Beer, Wine and Liquor Stores industry fared well during the past five years, as industry operators benefited from more consumers purchasing premium, high-margin alcohol. Per capita alcohol consumption is anticipated to decline at an annualized rate during the five years to 2014. However, this trend can be attributed to more individuals switching from purchasing and consuming low-quality beer, wine and liquor in bulk to premium alcohol products, which are typically packaged in smaller volumes. Furthermore, many province- and territory-run alcoholic-beverage retailers dominated the industry landscape, benefiting from a lack of regulatory hurdles that limited small, niche retailers.
Stringent alcohol-labelling requirements, coupled with regulations for interprovincial alcohol distribution, prevented many privately operated alcohol retailers from entering the market over the five-year period. Additionally, each province and territory in Canada establishes minimum prices that restaurants, bars, supermarkets and other alcohol retailers must charge for alcohol. While this trend benefited large-scale, government-run alcohol retailers due their ability to leverage low supply side costs, it hindered small alcohol retailers' ability to mark down prices and thereby boost sales volumes. Furthermore, according to IBISWorld Analyst Sarah Turk, “large, government-run alcohol retailers secure favourable contracts with global and Canada-based distilleries, wineries and breweries by purchasing in bulk, and generate alternative revenue from selling alcohol licences to private retailers.” During the five years to 2014, industry revenue is anticipated to grow at an annualized rate, including slow revenue growth in 2014 due to growing demand for premium alcohol and a larger drinking-age population. Profit is expected to rise, “attributable to more consumers buying high-margin, high-quality alcoholic beverages, such as fine whiskies and ready-to-drink cocktails,” says Turk.
The Beer, Wine and Liquor Stores industry has a medium level of concentration, with the top four industry players expected to account for nearly half of total industry revenue in 2014. In the five years to 2019, industry revenue is forecast to grow at an annualized rate. The regulatory environment will likely constrain industry revenue growth; for example, individuals will soon be to transport wine between provinces and territories, hampering industry retailers. As regulation in this industry decreases, competition for large alcohol retailers will intensify, due to local wineries directly providing wine to consumers.
For more information, visit IBISWorld’s Beer, Wine & Liquor Stores in Canada industry report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
IBISWorld industry Report Key Topics
The Beer, Wine and Liquor Stores industry includes stores and agencies that are primarily licenced to sell alcoholic beverages for off-premise consumption. The industry excludes wholesalers and grocery, convenience and gas station stores.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US and Canadian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.