Ten things to know about the late-night market

CGA’s business unit director for food and retail Karl Chessell reports back from this week’s UKHospitality Bar and Nightclub Conference.

Earlier this week, I was at The Troxy in London speaking with the operators in the late-night sector about the many challenges they’re facing at the moment as part of the UKHospitality’s Bar and Nightclub Conference. 

I was joined by a roster of great speakers including Peter Marks from The Deltic Group, JJ Goodman from The London Cocktail Club and Kate Nicholls from UKHospitality to discuss this dynamic and fast-evolving sector and how innovative and flexible brands can continue to thrive.

Here are ten of the key trends to watch that I covered in my session:

1. The decline in numbers is slowing

CGA’s Outlet Index shows that Britain’s number of late-night outlets has fallen by 15.2% in the last five years—a much steeper rate of decline than the 5.6% on-trade total. But in the last 12 months, closures have slowed to just 1.9%. That suggests that the long-term clear-out of unsustainable late-night venues may be nearing an end.

2. Cities are up, towns are down

Key regional cities are growing and exerting influence on surrounding towns. City centres now have a 47.2% share of the late-night market, up a couple of percentage points from five years ago, while large towns’ share has fallen back, to 33.4%.

3. Demand is stable

With food delivery and TV subscription services both booming, consumers have a host of temptations to stay in—but they still love going out too. CGA’s consumer research indicates that demand is largely stable; 59% of people intend to go out the same amount over the next 12 months, while 18% plan to go out more and 18% will go out less.

4. Supply may have eased but quality has risen

With consumers seeking higher quality of experiences on their evenings out, late-night operators are raising the bar with high quality venues. Venues in CGA’s ‘Premium’ late-night category have increased by 0.7% year-on-year, while ‘Mainstream’ sites have dropped 2.6%.

5. The sector massively punches above its weight

While 8.2% of Britain’s licensed venues are late-night, they represent 18% of total drinks sales by value—proof that this is a hugely important sector. It is also a Launchpad for new brands, with 37% of the distribution of new products launched in 2018 being in late-night venues. Brands want their products to be associated with great experiences that the late-night sector consistently delivers.

6. Three in four consumers pre-plan

More than a third (37%) of consumers always pre-plan, and a similar number (38%) sometimes do. This offers an opportunity for operators to build strategies that take advantage of this planning phase. Three quarters (73%) of nightclub visitors plan at least a few days in advance, so a strong social strategy and securing pre-bookings can reap rewards for savvy operators.

7. Pre-drinking is a drain—but an opportunity too

Well over half (62%) of consumers say they pre-drink at home before a night out—a trend that pulls spend away from late-night venues. But the flip side is that this represents an opportunity too: three quarters (74%) say they would consider pre-drinking at a venue rather than home—so long as the value and offer are right.

8. The weekend-away market is growing

The average spend on a night out is £98.29, with 19% of that going on accommodation. A tenth (10%) of all visits to late-night bars are made as part of city / weekend breaks in the UK, and operators can capitalise on the growing trend of people seeking out cities to explore and party in.

9. Social creates FOMO

More than two in five (42%) late-night consumers feel like they are missing out when they see others’ social media feeds. That’s not surprising, since 84% of consumers have uploaded images and videos on a night out—and 45% do so every time they head out! Operators who ensure their venues look amazing and facilitate great photo opportunities can quickly build a social buzz around their brands.

10. Late-night is where people find love!

Despite the rise of dating apps, people continue to seek romance at late-night bars, restaurants and nightclubs. 57% of consumers say they will go on a night out to a bar or nightclub to meet a partner—significantly more than will use an app to do so (25%).

To receive the full deck or for more exclusive insights from the late-night sector and to pinpoint opportunities for growth, contact me, Karl Chessell.

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