In the spirit of resolutions, January 2024 witnessed a positive 1.4% increase in year-over-year same-store sales, signaling a promising retail trend, according to data from National Retail Solutions (NRS). However, beneath this surface lie intriguing nuances — notably, a 10% decline in sales compared to December 2023, accompanied by a 6.6% reduction in overall store visits.
Dry January, a movement promoting abstinence from alcohol post-December indulgences, emerges as a key player in this retail transformation. The decline in sales and foot traffic during this period responds not only to seasonal expectations but also reflects the influence of New Year’s resolutions. As individuals prioritize healthier lifestyles, purchases associated with indulgence, including alcoholic beverages, experience a noticeable dip.
Alcohol, traditionally a driver of foot traffic for small-format retailers, takes a back seat during Dry January.
Intriguingly, when consumers purchase beer, 58% of the time it’s the sole item in the basket. Similarly, 49% of spirits and 45% of wine purchases are exclusively single-category transactions at NRS’ small format independent retailers.
This trend significantly contributes to the overall reduction in store visits during this period. Stores that do not sell alcoholic beverages also experienced a decline in traffic, albeit not as pronounced as those that do. In 2023, despite total alcoholic beverage sales being up 7%, January 2023 saw the lowest sales by far, averaging beer sales 18%, spirits 11% and wine 7% below the rest of the year, emphasizing the typical January slowdown.
All in all, January 2024 presents a drier landscape compared to 2023, with beer sales down 18% from December 2023, leading to an overall decrease of 1% compared to January 2023.
Dry January’s impact extends beyond the absence of alcoholic beverages. When these items aren’t purchased individually, consumers, often on the lookout for their six-pack, explore additional categories typical of small format and on-the-go purchases.
Tobacco items, salty snacks, non-alcoholic beverages and candy experienced significant month-over-month declines, highlighting a slower start in units for 2024, with marginal dollar increases attributed to price adjustments.
Standout subcategories include a remarkable 23% surge in non-alcoholic beer dollar sales and the notable growth of non-tobacco nicotine pouches, representing approximately 30% of the smokeless tobacco category and almost doubling in volume compared to the previous year, NRS found.
Despite non-alcoholic beer being available in only 50% of stores selling beer, there’s a surge in product offerings.
Each store now carries approximately one additional unique item compared to last year, showcasing an optimized product diversity that aligns with evolving consumer preferences.
Understanding these interconnected trends provides retailers, brands and manufacturers with a unique opportunity to adapt strategies to align with evolving consumer behaviors.
Dry January, while impacting specific categories, sets the stage for a rebound in February, historically marked by increased alcoholic beverage sales.
Brandon Thurber is the vice president of data sales & client success at NRS. For more information visit: nrsinsights.com