Bars & Nightclubs
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 37,490 bars and nightclubs in the US make most of their profits from alcohol sales. Nonalcoholic beverages, food and snacks, and entertainment services are additional revenue streams.
Regulatory Compliance
Because of the effect of alcohol on health, establishments that serve alcohol are highly regulated.
Competition for Leisure Time
People visit bars to socialize and be entertained, but new technologies are allowing many people to do those same activities from the comfort of their homes at a fraction of the cost of a typical night out.
Industry size & Structure
An average bar or nightclub has about 10-12 employees, $856,000 in annual revenue, and pays $190,000 in salaries.
- The US has about 37,490 firms with 433,000 employees and total sales of $32.1 billion.
- 72% of firms have fewer than 10 employees, but they account for just 31% of industry revenue and 28% of employment.
- Local/regional regulations make it difficult for national chains to operate in this segment; the 50 largest firms account for less than 9% of industry sales.
- National chains include Coyote Ugly, Voodoo Lounge, House of Blues, and Tao Group Hospitality.
- It is estimated that over half of startups will fail within the first three years, and around a quarter will fail in the first year.
Industry Forecast
Bars & Nightclubs Industry Growth
Recent Developments
Oct 20, 2024 - Strong September Jobs Report
- Eating and drinking places added a net 69,400 jobs in September on a seasonally-adjusted basis, according to the Bureau of Labor Statistics. September’s strong jobs number was the largest monthly increase in over two years, according to the National Restaurant Association. More broadly, hiring in the leisure and hospitality industry accounted for 78,000 of the 254,000 jobs (30%) added in September, per the BLS. Spending on food, drinks, and travel powered much of September’s strong hiring even as other sectors slowed. Underpinning strong hiring by the sector was solid growth in personal consumption expenditures, which rose by 2.2% year-over-year in September. Wage growth, which has been outpacing inflation, is keeping consumers going back to restaurants. Also, lower gasoline prices are leaving more money to spend on dining out. Strong hiring in September’s followed a solid August during which restaurants added 29,900 jobs.
- Employment by bars and nightclubs grew by 3.4% in July compared to a year ago, according to the latest US Bureau of Labor Statistics data. Both employment and average industry wages at bars and nightclubs were near record-high levels in July, with the average industry wage up 1.2% year over year to $22.22 per hour. Growing payrolls at bars and nightclubs are supported by rising sales for food services and drinking places, which rose 3.5% in June year over year but fell 3.6% from their peak in May, according to Census Bureau figures.
- Review sites are an important marketing tool for bars, especially in areas with lots of tourists, Bars & Restaurant News (B&RN) reports. Review sites are tourists' top source of information on where to go and are more likely to be viewed than an establishment’s own social media, according to B&RN. As such, bars (and nightclubs) must carefully manage their image across multiple review platforms – especially the three most popular: Google, Yelp, and TripAdvisor. A bar’s star rating has a big impact on attracting new customers. For example, a Harvard study of the impact of Yelp rating changes on restaurants found that an increase of one star corresponded with an increase in sales of 5-9%. The Harvard study also found that longer reviews carried more impact than shorter ones and that the overall number of reviews influenced the perceived value of the reviews. B&RN recommends responding to every review.
- Restaurants are ditching QR menu codes, The Wall Street Journal reports. Growing customer complaints and concerns over the ubiquitous codes – a pandemic-era adaptation to reduce contact that has lingered – have convinced some sit-down restaurants to retire them for good. Others are taking a hybrid approach, with QR codes as a secondary approach to ordering or paying the tab. Half of respondents to a January survey said having QR codes wouldn’t encourage them to visit a restaurant more often, according to Technomic. In 2022, the market research firm found that 88% of consumers preferred paper over QR code menus when dining at a sit-down restaurant. Attitudes about QR codes skew along generational lines, according to WSJ, with younger diners appreciating the more efficient service they get using QR codes. Readability, privacy concerns, and unfamiliarity with the technology among some users are reasons for preferring analog to digital menus.
Get A Demo
Vertical IQ’s Industry Intelligence Platform
See for yourself why over 60,000 users trust Vertical IQ for their industry research and call preparation needs. Our easy-to-digest industry insights save call preparation time and help differentiate you from the competition.
Build valuable, lasting relationships by having smarter conversations -
check out Vertical IQ today.