London, United Kingdom (PRWEB) August 13, 2013
The music has stopped for many nightclubs during the past five years. According to IBISWorld industry analyst Steven Connell, “legislation extending licensing hours for other drinking establishments and banning smoking in venues has removed the industry's main competitive advantage”. Where late-night revellers once had to go to nightclubs, they can now stay at a pub or bar and enjoy a wider selection of drinks, cheaper prices and a more relaxed atmosphere.
Nightclubs have also come under pressure from the sharp economic downturn, which has made clubbing unaffordable for many. Those who have continued frequenting nightclubs have chosen to take advantage of cheap supermarket alcohol to ‘pre-drink' before leaving home, constraining revenue from drinks sales. This has forced nightclub operators to increase their cover charges and has hit profitability. Industry revenue is estimated to contract at a compound annual rate of 5.5% over the five years through 2013-14 to reach £2.41 billion. Revenue is expected to contract by 4.1% in 2013-14.
The prospect for nightclubs will remain dim over the next five years. Connell adds, “nightclubs will continue to suffer competition from late-night bars and other pubs that offer wider selections of food and drink, can afford to charge cheaper prices and have more attractive locations and décor.” The slow economic recovery will continue to weigh on growth as young people choose to stay at home or go to parties to drink and listen to music. Independent nightclubs that connect with patrons via social media, diversify their food, drink and entertainment offerings and, most importantly, stay on top of the latest music trends, should prove the most successful. IBISWorld estimates that industry revenue will grow only weakly over the five years through 2018-19, with weak growth in later years just offsetting earlier losses.
The Nightclubs industry is highly saturated, characterised predominantly by a large number of small single-site operators, which account for the majority of industry market share. The four largest players in the industry generate an estimated 7.4% of industry revenue but no player is considered a major player.
For more information on the Nightclubs industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
The Nightclubs industry comprises mainly licensed establishments providing dance and musical entertainment services. The industry is distinguished from public houses, bars, hotels and restaurants, which are principally food and beverage service establishments.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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