Drinkers spending up for Christmas and New Year’s celebrations, says Dan Murphy’s boss

Dan Murphy’s is not witnessing any pre-festive season ‘trading down’ to cheaper drinks, despite cost-of-living pressures.

Dan Murphy’s managing director Agi Pfeiffer-Smith says cyber week sales were the highest on record for the chain.

Dan Murphy’s managing director Agi Pfeiffer-Smith says drinkers are happy to spend up as the nation prepares for Christmas and New Year celebrations.

However, she is cautious about the propensity for that spending to continue into the new year.

In the meantime, Australians excited by the prospect of celebrating the first lockdown and restriction-free festive season since 2019 are buying up beverages early.

That behaviour this week delivered Dan Murphy’s its biggest cyber week sales ever.

And unlike the supermarkets where many consumers are trading down to cheaper groceries to combat inflationary pressures on household budgets, Ms Pfeiffer-Smith said she had not witnessed that flight to cheaper alcohol at Dan Murphy’s bottle shops and online store.

“In terms of the product they are buying, they are still buying sort of similar products to what we’ve seen and I think a little bit of that is probably a reflection of the season – we often see people trade up at Christmas time,” she said.

“So they buy things for gifts and they spend more on those categories, or they buy special treats for themselves; and the case studies that we look at are things like red wine, fortified wine and whiskey where people tend to spend 20 to 25 per cent more per item on those types of things this time of year than they would.”

She said the early signs of Christmas trading hitting her stores included a sudden ramp-up in sparkling wine sales. Dan Murphy’s typically experienced a fivefold increase in sales of sparkling wine and champagne in the weeks heading into the end of the year.

Dan Murphy’s managing director Agi Pfeiffer-Smith.

Ms Pfeiffer-Smith said customers were also planning more in advance for their celebrations with friends and family, reflecting their hopes for social gatherings after years of pandemic lockdowns and ruined social occasions.

“We are really starting to see customers plan ahead for Christmas. I think that there’s more confidence this year in terms of people being willing to plan and buy, and this will really be the first Christmas I think in a couple of years where people will be able to truly get together with family – particularly if their family is overseas and things like that,” she said.

“It’s going to be interesting to see how customers will behave. I think for us, we think value will be important for customers and so we’re really keen to make sure they know they can come to us for value and that we will guarantee them the lowest prices as they think about what they want to spend on.

“But I guess it’s one of those things where we don’t unfortunately have a crystal ball on how it will play out. We do know that alcohol tends to be fairly resilient generally as a category but I think there will definitely be changes in patterns and behaviour.”

She said Dan Murphy’s could be the beneficiary of many people deciding to have a night in rather than go to an expensive restaurant because they would buy a more premium bottle of wine to consume at home.

“And so we can be sort of beneficiaries of that premium and as well as that more value end, and so the breadth of range I think is going to be important in this time as customers will get impacted differently depending on their budget,” she said.

Originally published as Drinkers spending up for Christmas and New Year’s celebrations, says Dan Murphy’s boss