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
Jun 20, 2024 - New High for Wages
- Employment by bars and nightclubs grew 8.3% in April compared to a year ago, approaching its June 2023 peak, according to the latest US Bureau of Labor Statistics data. Meanwhile, average industry wages – up sharply since the start of the year – climbed to a new high of $22.24 per hour in April. Rising sales for bars and restaurants and consumer spending – up 3.1% in March year over year – are supporting swelling payrolls for bars and nightclubs. In March, sales for food services and drinking places rose 6.2% year over year and 9.8% versus February, according to Census Bureau figures.
- 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 some reasons given for preferring analog to digital menus.
- Sales of non-alcoholic beer are soaring, The Wall Street Journal reports. While overall sales of beer, hard seltzer, and alcoholic cider spiked during the first year of the pandemic, sales have since lost their fizz, according to WSJ. By contrast, sales of non-alcoholic beer were up 32% compared to a year ago in the 52 weeks through Sept. 9 and have averaged 31% growth over four years, according to data from NielsenIQ cited by WSJ. Beverage analysts attribute the rising sales of non-alcoholic beer to better quality and taste and a generational shift in drinking culture, with younger consumers, in particular, drinking less. The growth of the non-alcoholic beer category may also reflect savvy marketing and positioning by beer makers. Moreover, non-alcoholic options open up beer-drinking times and occasions, NielsenIQ data finds. Beer distributors may want to stock more non-alcoholic brews to compensate for falling sales of their alcoholic counterparts
- The trend toward earlier bedtimes for 20-somethings is prompting adjustments by bars and nightclubs, The Wall Street Journal reports. Younger people are increasingly prioritizing sleep as part of a healthy lifestyle. (They’re also drinking less.) According to an analysis of American Time Use Survey data by RentCafe, cited by WSJ, in 2022, those in their 20s reported getting an average of nine hours and 28 minutes of sleep, an 8% increase from the eight hours and 47 minutes they said they slept in 2010. To tempt the early-to-bed crowd, bars and clubs are adding matinee dance parties and other daytime events. As more Americans trade late-night weekend barhopping for late afternoon/early evening entertainment, seatings between 4 p.m. and 6 p.m. now make up 31% of reservations, up from 19% in 2017, with reservations between 6 p.m. and midnight declining, according to Yelp.
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