New operators are consistently entering the industry to satisfy new consumer trends
New York, NY (PRWEB) September 23, 2014
Having emerged from the recession relatively unharmed, the Bars and Nightclubs industry turned around in 2010 and has continued to make strides over the past five years, according to IBISWorld research. Revenue growth has been slow, however, hampered by shaky consumer confidence and stubbornly high unemployment, meaning people have been more content to drink at home rather than at bars or nightclubs. The industry is expected to marginally grow over the five years to 2014. Industry revenue is expected to grow noticeably in 2014 alone as consumer confidence and disposable income pick up, allowing people to spend more of their pay at bars and nightclubs.
Bars and nightclub operators have attempted to respond to lackluster growth by diversifying into a range of new concepts such as wine bars, cocktail lounges and brewpubs to attract new demographics. According to IBISWorld Industry Analsyt Andy Brennan, “New operators are consistently entering the industry to satisfy new consumer trends. As a result, 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. While per capita expenditure on alcohol is expected to slightly rise over five years to 2014, a rising number of consumers prefer drinking packaged beverages at home rather than alcoholic beverages at clubs or bars.
According to the report, the Bars and Nightclubs industry is highly fragmented and consists of a large number of small businesses that are often family owned and operated. The top four players in the industry account for very little of total revenue. Census information indicates that the most establishments are small businesses employing up to nine people, and a very large majority employ less than 50 people. There are limited economies of scale to be found than earning more than one venue due to the labor intensive and location-specific nature of the industry. Also, the varying state liquor laws makes it difficult for owners to form large chains. Due to the fragmented and small-business nature of this industry, especially in the way it operates, the level of concentration is not expected to change over the next five years.
Over the five years to 2019, IBISWorld research projects that this industry will continue to face competition from in-home alcohol consumption and nonindustry establishments that also serve alcohol, such as restaurants. In spite of these factors, the industry's financial performance is forecast to strengthen as the economy improves and consumer spending increases. “Bars will continue to introduce healthier and upscale products like craft beer and organic food to their menus,” says Brennan. In the five years to 2019, industry revenue is forecast to increase slightly.
For more information, visit IBISWorld’s Bars & Nightclubs in the US industry report page.
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IBISWorld industry Report Key Topics
This industry includes bars, taverns, pubs, lounges, nightclubs and other drinking places that primarily prepare and 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
About IBISWorld Inc.
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