Bars & Nightclubs
Companies in this industry sell alcoholic beverages for on-premises consumption and may also offer limited food service. The industry mostly consists of small, single-location businesses, as inconsistent liquor laws make it harder to operate establishments in multiple states or countries. Some larger US-based bar chains include McMenamins, Winking Lizard Tavern, and World of Beer. TAO Group Hospitality owns some of the top-grossing nightclubs, LAVO Nightclub, Marquee Nightclub, and Tao Downtown Nightclub, each have locations in New York City and Las Vegas. Leading companies in the less-fragmented UK market include pub operators Punch Pubs & Co and Stonegate Group, as well as the nightclub chain REKOM UK.
Bars and nightclubs market is forecast to reach over $30 billion at a compound annual growth rate (CAGR) of 5.09% between 2022 and 2027, according to Technavio. The increasing number of pubs and bars drives the market growth as the urban population worldwide has increased by more than 4% over the past ten years, according to the United Nations Conference on Trade and Development (UNCTAD).
The US bar and nightclub industry includes about 40,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $24 billion.
Competitive Landscape
Personal income and entertainment preferences drive demand. The profitability of individual companies depends on the ability to drive traffic and develop a loyal clientele. Large companies can offer a wide variety of food, drinks, and entertainment, and have scale advantages in purchasing, financing, and marketing. Small companies can compete effectively by serving a local market, offering unique products or entertainment, or providing superior customer service. The US industry is highly fragmented: the 50 largest companies account for less than 10% of revenue.
Bars and nightclubs compete with other venues that offer alcoholic drinks or entertainment, including restaurants, hotels, and casinos. Drinking establishments also compete with the home consumption of alcohol.
Products, Operations & Technology
Major sources of US industry revenue include beer (some 30% of revenue), distilled spirits or hard liquor (about 35%), food and nonalcoholic beverages
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