The nightclub industry has continued to evolve in the past two years; driven by increased competition in the late night market and changing customer habits and expectations. Operators have adapted by strengthening their offer through refurbishment, re-branding and repositioning - either as lounge/bar/club hybrids or large, “destination” venues.

There have inevitably been casualties in such a difficult market, with turnover remaining largely flat in 2006, however, the industry should emerge from this period in better shape to face the next round of challenges, including the impending smoking ban.

Operators are currently seeking to differentiate themselves from their competitors in the face of over-supply, which has frequently resulted in financial difficulty, price-cutting and disinvestment. This report examines how nightclubs are coping with the extension in late licensing, alongside increased consumer expectations over the past six years.


Table of contents:


Issues in the Market
Definitions

Abbreviations

Market in Brief
The competition is cut-throat…
…resulting in casualties
Nightclubs fight back
Young people today
Late night habits
See you on the dance floor

Internal Market Environment
Competition in the late night economy
Skills shortages
Binge drinking and anti-social behaviour
Door supervisors
Figure 1: SIA licensing statistics - door supervisors, 1 November 2006
The character of nightclub visitors
Figure 2: Frequency of visiting nightclubs, 2001-06
Figure 3: Frequency of visiting night clubs, by agreement with lifestyle statements on drinking, 2006
Figure 4: Frequency of visiting night clubs, by agreement with lifestyle statements on fashion and events, 2006
Figure 5: Frequency of visiting night clubs, by agreement with selected lifestyle statements, 2006

Broader Market Environment
Population trends
Figure 6: Trends in the age structure of the UK population, 18-24 and 25-34-year-olds, by gender, 2001-11
Lifestage trends
Figure 7: Forecast adult population trends, by lifestage, 2001-11
Student numbers
Figure 8: All students at publicly funded Higher Education Institutes by mode and level of study, 2000/01-2004/05
A third of 18-24-year-olds are students
Figure 9: Students versus non-students in the 18-24-year-old population, 2005
Young people’s debt

Competitive Context
Nightclubs lose out
Figure 10: Comparison of spend on selected leisure activities, 2000 and 2005
Other licensed premises
England and Wales
Figure 11: On-licensed premises in England and Wales, 1980-2004*
Scotland
Figure 12: Liquor licences in force at 31 december in Scotland, by type of premises, 1980-2004
Everyone’s getting the festival vibe
At-home drinking more popular than ever
Figure 13: Expenditure on alcoholic drinks, on- vs off-trade, 1995-2005

Strengths and Weaknesses in the Market
Strengths
Weaknesses

Market Size and Forecast

Figure 14: Trends in nightclub admissions and turnover, 2001-11
A dip in trading since the Millennium
Complicated picture in 2006
A cautiously optimistic future

Market Share

Figure 15: Leading multiple nightclub operators, November 2006

Companies and Products
Nightclub company turnover
Figure 16: Nightclub company turnover, 2004-06
Luminar plc
CanDu Entertainment Ltd
Novus Leisure Limited
Barclub Limited
Nexum Leisure Limited
G1 Group plc
Summit Clubs
Vimac Leisure
Utopian Leisure

Brand Communication and Promotion
Advertising expenditure
Figure 17: Selected nightclub operators and brands, September 2005-August 2006

Motivations For Going Out
Motivations for going out late at night
Figure 18: Motivations for going out late at night, September 2006
Figure 19: Most popular motivations for going out late at night, by age and gender, September 2006
Figure 20: Next most popular motivations for going out late at night, by age and gender, September 2006

Motivations for going out - detailed demographics
Figure 21: Most popular motivations for going out late at night, by detailed demographics, September 2006
Figure 22: Next most popular motivations for going out late at night, by detailed demographics, September 2006

Frequency of Visiting a Late Night Bar

Figure 23: Frequency of visiting a late night bar, September 2006
Figure 24: Frequency of visiting a late night bar, by age and gender, September 2006
Nights visited a late night bar
Figure 25: Nights visited a late night bar, September 2006
Figure 26: Nights visited a late night bar, by age and gender, September 2006
Thursday visitors = frequent attendance
Figure 27: Nights visited a late night bar, by frequency of visiting a late night bar, September 2006
Frequency of visiting a late night bar - detailed demographics
Figure 28: Frequency of visiting a late night bar, by detailed demographics, September 2006

What Type of Clubber Are You?
Figure 29: Classification of clubbers, September 2006
Figure 30: Classification of clubbers, by age, September 2006
News flash - clubbers like drinking and dancing!
Figure 31: Motivations for going out late at night, by clubbers, September 2006

Nightclub chains visited
Figure 32: Nightclub chains visited, by clubbers, September 2006

Which night?
Figure 33: Nights visited a nightclub, by clubbers, September 2006
Drinkers start the weekend early
Figure 34: Nights visited a night club, by motivations for going out late at night, September 2006

What deters you from visiting?
Figure 35: Deterrents from visiting nightclubs, by clubbers, September 2006

What would entice you to go?
Figure 36: Enticements to visiting nightclubs, by clubbers, September 2006
Drinks promotions could counteract high bar prices
Figure 37: Deterrents to visiting nightclubs, by most popular enticements, September 2006
Better customer service means goodbye to rude bouncers
Figure 38: Deterrents to visiting nightclubs, by next most popular enticements, September 2006

What type of clubber are you? - detailed demographics
Figure 39: Classification of clubbers, by detailed demographics, September 2006

Attitudes Towards Nightclubs and Spending Habits
Figure 40: General attitudes towards nightclubs, by clubbers, September 2006

Specific attitudes towards nightclubs
Figure 41: Specific attitudes towards nightclubs, by clubbers, September 2006

Consumer awareness of current industry issues
Figure 42: Awareness of late licensing, by clubbers, September 2006
Figure 43: Awareness of the impending smoking ban, by clubbers, September 2006
Figure 44: Awareness of clamping down on drink-related anti-social behaviour, by clubbers, September 2006
Figure 45: Awareness of responsible drinking initiatives, by clubbers, September 2006
Figure 46: Awareness of fingerprint scanning, by clubbers, September 2006

Spending habits in nightclubs
Figure 47: Spending habits in nightclubs/late night venues, by clubbers, September 2006