LONDON/NEW YORK (Reuters) - Meaghan Dorman's five New York bars look just as full as they always do in December - packed with couples on dates, holiday get-togethers and business meet ups. But when takings are counted, it's clear that customers are spending less. 

Dorman, bar director and partner of Raines Law Room and Dear Irving bars, each with multiple locations, said customers were buying fewer expensive craft cocktails, priced between $26 and $40, before switching to a cheaper tipple like wine. 

"You feel like you are busy all night, and we will be full all night," but revenues are down versus previous years, she added. 

Difficult economic conditions, such as high inflation, have left some U.S. drinkers, especially middle-income earners who used to splurge during the holidays, looking for ways to rein in their booze spending, three of the largest U.S. spirits distributors told Reuters.

The trend poses a challenge for major spirits producers like Diageo ( DEO ) and Pernod Ricard, for whom October, November and December are critical to help drive annual sales. Pernod, for example, made 30% of its annual sales during that period last year. 

Diageo ( DEO ) and Pernod declined to comment on current trading.

As well as buying less, some drinkers are switching to cheaper liquor brands and venues or reducing the amount of out-of-home celebrations they attend, Southern Glazers Wine & Spirits, Republic National Distributing Company and Breakthru Beverage Group, which count Diageo ( DEO ) and Pernod among their suppliers, said. 

Annually, wholesaler sales of spirits are expected to decline by 5.65%, with year-over-year trends pointing to potentially severe volume decreases over the festive period, trade group the Wine and Spirits Wholesalers of America told Reuters.

"Everything is slower," said Francis Creighton, the CEO of the wholesalers' group. "Consumers have to pay for rent, cars. There's a lot more competition out there for the last dollar in someone's wallet than there used to be."

In bars and nightclubs, a shift away from more expensive bottles to those in a price tier below was underway across categories of spirits, data from the wholesalers' group showed - challenging major producers' central strategy aimed at getting consumers to shell out for more expensive liquors.  

The companies are already struggling with a sharp downturn in U.S. sales following a post-pandemic boom; a relatively weak holiday season may compound their problems. 

SOME CHRISTMAS CHEER

Not all markets are seeing the same trends. In Britain, for example, large pub group Marstons ( MARZF ) reported Christmas Day bookings up 11% on last year, adding it has seen consumer spending recover.

In the United States, the biggest market for most major Western liquor producers, Southern Glazers is expecting "one of the more cautious, or challenging" holiday seasons in a while, though all three distributors said they did not expect sales to decline dramatically. 

Sales of spirits for at-home consumption, while lower margin, are up compared to last year. Higher earning consumers also remain resilient, and cheaper restaurants are benefiting as consumers seek value, Poelma said. 

Casual dining chains Chili's ( EAT ) and Applebee's, for example, offer holiday cocktails for between $5 and $7, with pricier options of up to $13. 

Those are unlikely to rival cocktails like the $28 Weaving Weber - the take on an old fashioned at Dorman's Dear Irving in Gramercy Park, New York, which contains artisanal tequila, xila-spiced agave syrup and angostura bitters. 

People tend to treat themselves to one such craft cocktail nowadays, whereas they previously could have up to four, Dorman said.

These trends were combining with longer-term shifts towards drinking less or experimenting with alternatives like THC-infused beverages, RNDC's senior vice president Emily Xu said. Tetrahydrocannabinol (THC) is the psychoactive compound in cannabis. 

Joseph Gabelli, a portfolio manager at spirits investor Gabelli Funds, said the U.S. trading raises questions over whether spirits makers' bid to shift drinkers to pricier brands could deliver sales at the same rate as it had in the past.