Industry operators have adapted to evolving consumer preferences to meet demand.
New York, NY (PRWEB) April 16, 2014
Operators in the Bars and Nightclubs industry have struggled under the weight of a number of social trends, including more people consuming alcoholic beverages at home rather than at bars and restaurants. Rising alcohol prices, people wary of drunk driving and evolving attitudes toward alcohol consumption have negatively impacted the industry. Per capita consumption of alcohol has declined per year on average over the five years to 2014. The decline in alcohol consumption in bars and nightclubs, as opposed to at-home consumption, has been even more poignant, in part due to stricter pricing regulation. The industry was not helped by the global recession during 2008 and 2009, when consumers were compelled to reevaluate their discretionary spending. Other industries that serve alcohol, such as restaurants, as well as alternative forms of entertainment, have strongly competed against the Bars and Nightclubs industry. As a result of these trends, industry revenue is expected to decline at an annualized rate over the five years to 2014.
Despite the industry's struggles, industry operators have attempted to respond by diversifying into a range of new concepts such as wine bars, cocktail lounges and brewpubs to attract new demographics. New operators are consistently entering the industry to satisfy new consumer trends. As a result, according to IBISWorld Industry Analyst Andy Brennan, “the industry has become more fragmented as drinking establishments cater to a larger range of niche markets.” Many of the remaining establishments have adapted their menus and entertainment offerings to accommodate consumer tastes. “The industry is expected to grow in 2014 as consumer confidence rises and consumer spending increases,” says Brennan.
The industry has a low level of market share concentration since the majority of bars and nightclubs are small, independent businesses. Industry operators will continue to contend with increasing competition from at-home alcohol consumption and other forms of entertainment over the next five years. However, the improvement in the broader economy is expected to drive bar and nightclub spending, especially as establishments devote more focus to ancillary product lines, like food services and live entertainment. Consumer spending is likely to grow at a much faster rate over the five years to 2019, driven by lower unemployment and disposable income growth. As a result, industry revenue is expected to increase over the five years to 2019.
For more information, visit IBISWorld’s Bars & Nightclubs in Canada industry report page.
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IBISWorld industry Report Key Topics
This industry includes bars, taverns, nightclubs and drinking places that serve alcoholic beverages for immediate consumption. These establishments may also provide limited food services.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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