When it Comes to Alcohol Sales, Happy Hour is Big Business
As bars and restaurants navigate the slowing growth of alcoholic beverage sales, many are exploring ways to keep customers engaged and coming back. But given the long operating hours of many establishments, however, operators need to know what time periods generate the most business as they plan their engagement strategies, whether it be through karaoke, live entertainment, dart-throwing contests or even more elaborate offerings.
As many might expect, Happy Hour, defined here as 5 p.m.-8 p.m., is the clear winner when it comes to on-premise alcohol sales. But as expected as it might be, a recent analysis from Nielsen CGA’s CLIP (Check-Level Insights Pool) data shows just how important this daypart is. In fact, U.S. bars and restaurants generate 60.5% of their average weekly sales from Happy Hour—just 15 hours of the total business week. The average happy hour check in the U.S. is $68.99 (after discounts), including food and drinks, which is $8 more than the average check during other daypart occasions.
As business picks up through the weekend, Nielsen CGA data shows that the Happy Hour/early evening daypart becomes less important. That said, however, the period is still the most important time of the day for dollar sales, representing 51% and 46% of total sales on Saturday and Sundays, respectively. While Friday, Saturday and Sunday contribute 40% more sales than the rest of the week combined, the new data about the strength of Happy Hour highlights a potentially undervalued occasion.
Weekday Underdog: Wednesday
Looking within the work week highlights the strengths of each day. While Thursday is often touted as a strong drinking occasion, Nielsen CGA data shows that Wednesday Happy Hour traffic is an average of 23.9% higher than other weekdays. This makes Wednesday’s Happy Hour the fourth most valuable day part for bars and restaurants, with the same daypart for Saturday and Friday coming in first and second place, respectively.
“For the first time, foot traffic and check averages are quantified and brands should act on it,” said Scott Elliott, Senior Vice President at Nielsen CGA. “This Wednesday Happy Hour ‘spike’ is an opportunity for retailers to better cater to consumer’s need for a mid-week break by promoting more premium products rather than the lowest priced alternatives so often available mid-week.”
Elliott adds that in today’s complex and increasingly competitive marketplace, companies need to tap into the power of data to gain a competitive advantage. Through transaction-level insights, brands are able to better understand the dynamics of their own products within the on-premise and begin to target often-overlooked days and time frames in order to drive traffic and increase revenue.