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 39,300 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.
Changing Regulations
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 for entertainment, but new technologies are allowing many people to do those same activities from the comfort of their home, at a fraction of the cost of a typical night out.
Industry size & Structure
An average bar or nightclub has about 7 employees, $681,000 in annual revenue, and pays $190,000 in salaries.
- The US has about 39,300 firms with 270,000 employees and total sales of $26 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 national chains difficult 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.
- It is estimated that over half of startups will fail within the first 3 years, and around a quarter fail in the first year.
Industry Forecast
Bars & Nightclubs Industry Growth
Recent Developments
Mar 13, 2023 - Sake Sales Soar
- Sales of sake – a Japanese alcoholic beverage that is brewed from fermented rice – are booming globally and in the United States, The New York Times reported in February. Japanese exports more than doubled in volume from 2012 to 2022, from roughly 14 million liters per year to nearly 36 million liters, according to trade group Japanese Sake and Shochu Makers Association, NYTs reports. Exports to the United States over that period grew to more than nine million liters per year, up from just under four million liters. While sake produced in the United States accounts for a small fraction sold domestically, sake breweries are popping up across the US, with a 24,000-square-foot brewery slated to open in May in Hot Spring, Arkansas that will be the nation’s largest. (Arkansas is the nation’s leading rice producer.)
- Bars, along with restaurants and hotels, are the US economy’s fastest growing employers, The Wall Street Journal reported in March. The leisure and hospitality industry continues to rebuild its workforce after cutting back during the pandemic’s early days, with job growth in the industry outpacing most other industries. Leisure and hospitality led job growth in February, with 83,000 additions, accounting for roughly a third of the 242,000 additions to private payrolls for the month, according to ADP.
- Tequila is having the greatest impact in on-premise alcohol sales, according to Beverage Information Group’s (BIG) most recent survey. About 42% of the bars and restaurants responding to the survey said the rise in tequila sales was having the most impact on their business. Trailing tequila were craft beer and whisky with 21% and 10.5% of respondents reporting rising sales of those beverages, respectively. Sales of cocktails and spirits were strong with 63% of respondents reporting rising sales. Beer and wine trailed with 52.6% and 42.1% of the bars and restaurants that responded reporting sales increases in those categories respectively, according to BIG data.
- Sales growth of more expensive wine and spirits is slowing, and even reversing, as consumers seek out more value, The Wall Street Journal reported. The decade-long trend toward higher-priced drinks that drove sales growth in the wine and spirits categories is ending as even the least price-sensitive shoppers pull back on spending amid fears of a coming recession and the decline in the stock market. US retail-store sales of superpremium spirits fell 3.7% in the 48 weeks ended December 3, after growing 4% in 2021, according to an analysis of Nielsen data by the Bump Williams Consulting Co. Sales growth of ultrapremium spirits has slowed to 2% from 24% in 2021, WSJ reports. Belt tightening this holiday season has consumers opting for less expensive Italian prosecco over pricey French Champagne, according to online alcohol retailer Drizly.
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