Today’s liquor shopper isn’t disappearing; they’re becoming more intentional. What we’re seeing isn’t a decline in drinking culture, it’s a shift in mindset as Australians are drinking with purpose, not volume.
Consumers face a new reality. Cost-of-living remains front of mind and ~60% of Australians cite this as a top societal concern in early 2026, a level more than double what it was in 2021. This signals that more consumers are feeling the continued burn of higher prices, despite the buoyancy of spending seen over 2025. While Australian household spending remained high and showed strong recovery from 2024, momentum slowed alongside rate hikes and high household budget stress which suppressed sentiment and spend. Looking ahead, high levels of uncertainty, the looming spectre of rising inflation, and expected continued rate hikes in response to these factors support the notion that this new consumer reality is here to stay (at least for a while).
Moderation of alcohol has become the new norm. The acceleration of softening demand has underpinned the post COVID hangover over the past five years however, claimed moderation has plateaued in the latest year. The drivers of abstinence and moderation of alcohol purchases are the product of both cyclical and structural factors. A moderation mindset is the leading driver of purchase restraint for alcohol in early 2026, as 40% of Australians claim that watching the amount of alcohol they consumed is the reason for slowing or stopping purchases over the last 6 months. Beyond this, cutting back on alcohol purchases as a means of dealing with cost-of-living pressures remains a major driver of purchase restraint, and is likely to retake its position as the primary driver in coming months.
This change in purchasing (and consumption) behaviour has muted dollar sales growth in the off premise and negated the majority of forward momentum from inflation. Despite these challenges, over 75% of households purchased liquor in 2025 and key shopper metrics show improvement. While fewer households purchased alcohol, the rate of growing abstention in 2025 slowed compared to the year prior. Furthermore, increases in the average basket size and basket spend are promising and demonstrate further evolution in purchasing behaviour.
Value, for shoppers, has been redefined. The growth of reliance on promotions has increased sharply over the latest year and buying on deal is the top response to rising living costs, while fewer shoppers claim to have resorted to trading down to less expensive substitutes as a means of dealing with cost pressures in the same comparative period. Shoppers have become even more price and discount attuned, as shelf price, promotions and brand trust are factors that see increased influence on the shopper decision for instore liquor purchases during 2025. “Good Promotions and Specials” are rated as extremely important in choosing where to shop for 47% of Australians, demonstrating that consumers aren’t just seeking deals, they are actively pursuing them. Pulling the promotional lever has led to record sales over 2025 in some instances however these results have come at a dire cost of margin erosion and resulted in gross profit margins being seen as a key risk for several retailers in 2026.
RTD remains the largest growth contributor and has capitalised on consumers preferring higher ABV which offers shoppers “bang for buck” as a form of value for money. Low/no sugar which catered to “better for you” needs and preferences also contributed notable growth for the category. Sachi8 - a wine-based RTD - leverages attribute stacking to cater to “better for you” and “value for money” needs by offering shoppers a fresh flavoured, zero sugar, 8% ABV offering sold at a compelling price point below $20 for a 4 pack. This serves as an example of how brands can offer multidimensional value, without engaging in the race to the bottom in an effort to capture growth or win the fight for market share.
Beer has seen performance bounce back, where the dynamic has been driven largely by mid strength and low/zero carb offerings which offer consumers “better for you” choices that cater to the evolving need for moderate options. Zero-alcoholic beverages face further declines as the grocery platform contracts however, growth through liquor channels has accelerated in 2025; highlighting the sustained, but niche, need for substitution as shoppers seek to use zero-alc alternatives as a mechanism for moderation by abstaining or ‘zebra-striping’ to reduce consumption intensity, while still enjoying the taste they know and love. To this point, Beer dominates the zero-alc space largely due to taste and flavour that most closely resemble full-alc equivalents, as well as the focus by established brands (including Guinness) that seek to stretch their propositions into this space.
As Australians drink with purpose rather than volume, a very different competitive landscape is being created – one rooted in value, trusted brands and meaningful occasions.
Intentionality is the new baseline and competing on meaning not mass is crucial. To solve for this, there is the need to understand what portfolios look like in a world where the battle is not for volume, but for meaning. Brands need to be ready to win on relevance over repertoire, quality over quantity and experience over excess.
Value is now multidimensional and redefining it is critical to avoid racing to the bottom. If promotions are now a predictable part of shopper behaviour, not a temporary tactic, it becomes vital to reposition “value” beyond discounting. The jobs to be done will include understanding which levers (format, occasions, trust cues, brand memory structures, premium trade ups) will create value without eroding margin. Beyond this, it will be essential to reset the “promotion pandemic” to a healthy and sustainable industry baseline.
The market is rebalancing, not retreating. It will be vital to align bets with the categories that match intentional consumption – by truly innovating towards where the consumer is going, not towards where the industry wishes growth still was. It’s time to rebalance innovation and brand investment to match the way Australians now drink: Fewer occasions, higher expectations, more curated choices.