Lanson Champagne sales struggle to spark as prices escalate
The Plunge of Champagne Lanson's UK Sales Amid Fiscal Struggles
In 2024, Champagne Lanson endured a whopping 27% drop in UK sales, as shrewd drinkers shied away from bars and eateries during the staggering cost-of-living crisis. These recent disaster records can be found nestled within newly disclosed account statements filed with Companies House.
Consequently, Lanson's turnover plummeted from a robust £45.2m to £35.5m, while pre-tax profit plummeted from £1.7m to a mere £819,000. Established as early as 1760, the champagne producer bemoans the very roots upon which it was built.
The brand's fall from grace can partly be attributed to the overall decrease in champagne exports from France to the UK, which slid by 7.5%. From 25.5 million bottles imported into the UK in 2023, the intake dropped to a disappointing 23.6 million bottles in 2024.
Despite the reduced volume, the average value of champagne exports to the UK escalated by an encouraging 7.4% over the year. Notably, the average value per bottle ascended by a respectable 6%.
Consumers Cautiously Curb Champagne Lanson
The board's statement confirms that "the year commenced under a disheartening tone" due to lingering surplus inventory and stagnant consumer consumption. Notwithstanding the slight slump in UK inflation and interest rates, this financial malaise did not translate into increased discretionary spending.
Instead, consumers maintained their thrift, adhering to frugality as the guiding principle for purchases. In the "off trade channel," retail sales increasingly favored store-exclusive champagne labels, often at the expense of the well-regarded Grandes Marques brands.
During the fourth quarter of 2024, rival brands amplified their promotional activities, capitalizing on the surplus stock circulating in the market. This intensified competition further impacted overall sales.
Key retail partners adopted a more conservative purchasing approach, slashing stock levels to manage cash flow, which directly affected Lanson's sales volumes. Consumers' frequenting of bars and restaurants also dwindled, opting instead for home-based gatherings.
Champagne Lanson reports that "despite the challenging sales landscape, stringent cost control ensured the company's financial stability throughout the year."
Iconic Label Navigating ‘Volatile Environment’
On the horizon, Champagne Lanson expresses hope in achieving "consistent, profitable, and responsible growth." This ambitious goal remains daunting in the present "volatile environment," characterized by waning growth, expensive borrowing, and geopolitical challenges.
Undeterred, Lanson will continue to concentrate on strategies designed for captivating its brand and expanding marketing investments, intending to ride out the economic turbulence. Cost control measures will remain steadfast to accomplish the brand's strategic objectives.
Factors Shaping Champagne Market
Though precise data on Champagne Lanson's UK sales in 2024 remains elusive, it's clear that multiple interwoven factors hinder the champagne market as a whole. The following factors might impact Lanson's performance indirectly:
- Cost-of-Living Crisis: Public concerns regarding escalating living costs likely diminish discretionary spending, including expenditures on luxury items like champagne.
- Changing Consumer Preferences: There is evidence of a global shift towards health-conscious choices, which may prompt consumers to prioritize non-alcoholic and low-alcohol beverages.
- Economic Factors: An unstable economy and apprehensions about a recession foster austerity among consumers, negatively impacting luxury goods like champagne.
- Anti-Alcohol Movements: Rising awareness regarding alcohol's detrimental health effects, instigated by organizations such as the World Health Organization, may impede consumption, including champagne consumption.
- Regulations and Production Costs: Tighter regulations on wine production and sales could incur additional expenses for producers, potentially resulting in higher prices for consumers, potentially impacting sales.
- In the wake of the cost-of-living crisis, Champagne Lanson's shrewd consumers have been cautiously curbing their purchases, leading to a decline in sales.
- As a result of changing consumer preferences and an unstable economy, Champagne Lanson is navigating a volatile environment, striving for consistent, profitable, and responsible growth.
- Economic factors, such as waning growth, expensive borrowing, and geopolitical challenges, pose challenges for Champagne Lanson, making its ambitious goals difficult to attain.
- To counteract these challenges, Champagne Lanson plans to focus on brand captivation, marketing investments, and cost control measures to weather the economic turbulence.
