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.

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.

Changing Regulations

Because of the effect of alcohol on health, establishments that serve alcohol are highly regulated.

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 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 three years and around a quarter fail in the first year.
                              Industry Forecast
                              Bars & Nightclubs Industry Growth
                              Source: Vertical IQ and Inforum

                              Recent Developments

                              Apr 20, 2024 - Bars & Nightclubs Add Jobs
                              • Employment by bars and nightclubs declined in January versus December. Still, employment grew 6.1% compared to a year ago after rising by 8.5% in the previous annual comparison, according to the US Bureau of Labor Statistics. Average industry wages were $21.03 per hour in January, a 5.3% year-over-year increase, per the BLS. Robust consumer spending in 2023 drove business at bars and nightclubs. However, according to Fitch Ratings, consumer spending is expected to moderate this year. Sales for the US bars and nightclubs industry are forecast to grow at a 3.54% compounded annual rate from 2024 to 2028, slower than the growth of the overall economy, according to the Interindustry Economic Research Fund.
                              • 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 court 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.
                              • 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. 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.
                              • Artificial intelligence has a role to play in "deskless" jobs like those in the food and beverage industry, according to Bar & Restaurant News. Scheduling and schedule management, a challenge for many employers managing multiple shifts, was cited as the number-one thing bar and restaurant managers wish was intelligently automated, according to Legion Technologies, the maker of Legion Copilot, a generative AI-powered workforce management assistant for the food service and hospitality industries. "Through simple voice commands, they [employees] can bypass manual searches on the app to get the information they need, whether it’s their schedule for the next week, important compliance documents, or tips from the employee handbook. The introduction of generative AI won’t interfere with day-to-day systems and processes but will make them easier to manage and understand,” says Legion’s chief customer officer. The AI-powered tool allows easy access to schedule data and insights to easily modify schedules.
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