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Nightclubs - UK - January 2012

“As well as utilising social media for building stronger relationships with customers (rather than simply trying to blatantly use it as another sales tool), clubs can also tap into the gamification trend through loyalty products like Foursquare and Gowalla which encourage people to visit venues over and over again to receive rewards.”

– Michael Oliver, Senior Leisure and Media Analyst

Some questions answered in this report include:

  • How can nightclubs broaden their appeal?
  • How prevalent is pre-loading and how can clubs counter this trend?
  • What can clubs do to attract customers from competitors?
  • What opportunities are being created by the growth in social media usage and digital device ownership?

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Table of contents

  1. Introduction

      • Definition
        • Abbreviations
        • Executive Summary

            • The market
              • Figure 1: The value of the UK nightclubs industry, 2006-16
            • Market factors
              • Figure 2: Frequency of visiting nightclubs, 2011
            • Companies, products and innovation
              • Figure 3: Leading nightclub operators in the UK, by turnover*, 2011
            • The consumer
              • Figure 4: Frequency of nightclub visiting, 2011
              • Figure 5: Top five factors which might encourage clubbers to visit clubs more often, November 2011
              • Figure 6: Clubbers' drinking behaviour, November 2011
              • Figure 7: Trends in clubbing and spending compared to a year ago, November 2011
              • Figure 8: Top five factors influencing choice of one nightclub over another, November 2011
              • Figure 9: Top six most popular attitudes towards dancing, music, nightclubs and clubbing, November 2011
            • What we think
            • Issues in the Market

                • How can nightclubs broaden their appeal?
                  • How prevalent is pre-loading and how can clubs counter this trend?
                    • What can clubs do to attract customers from competitors?
                      • What opportunities are being created by the growth in social media usage and digital device ownership?
                      • Future Opportunities

                          • Trend: Secret Secret
                            • Trend: FSTR and HYPR
                            • Internal Market Environment

                              • Key points
                                • Clubbing declines slightly in 2011
                                  • Figure 10: Frequency of visiting nightclubs among adults, 2010 and 2011
                                  • Figure 11: Frequency of visiting nightclubs among 15-17-year-olds, 2010 and 2011
                                • A good channel for launching new drinks
                                  • Figure 12: Frequency of visiting nightclubs, by agreement with lifestyle statements on drinking, 2011
                                • Music, fashion and technology matter to regular clubbers
                                  • Figure 13: Frequency of visiting nightclubs, by agreement with lifestyle statements on fashion and events, 2011
                                • Regular clubbers are also adventurous and spontaneous
                                  • Figure 14: Frequency of visiting nightclubs, by agreement with lifestyle statements, 2011
                                • Pre-loading concerns continue but minimum pricing on the horizon?
                                  • Late-night levy and Early Morning Restriction orders loom
                                    • On-trade gets its act together
                                      • Door staff regulation continues despite loss of central funding for SIA
                                        • Overheads on the rise
                                          • Figure 15: Trends in utility prices* paid by non-domestic consumers, 2006-11
                                          • Figure 16: Trends in the National Minimum Wage (for workers aged 22+ until 2010 when this rate applied to those aged 21+) compared to the retail price index, 2006-11
                                      • Broader Market Environment

                                        • Key points
                                          • Gloomy economic outlook hangs over industry
                                            • Figure 17: GDP, PDI and consumer expenditure, at constant 2011 prices, 2006-16
                                          • Double-dip recession still a possibility
                                            • Figure 18: Trends in quarterly GDP, Q1 2006-Q3 2011
                                          • Consumer confidence at three-year low
                                            • Figure 19: Trends in consumer confidence, January 2008-December 2011
                                          • Unemployment continues to rise – particularly among young people
                                            • Figure 20: UK unemployment rates, by age band (seasonally adjusted), Q3 2008-Q3 2011
                                          • Some regions hit harder than others by unemployment
                                            • Figure 21: UK unemployment rates, by region (seasonally adjusted), Q3 2011
                                          • Population trends not helpful to nightclubs industry
                                            • Figure 22: Trends in the age structure of the UK population, 2006-11 and 2011-16
                                          • Clubs high up list of areas cut back on in past 12 months…
                                            • Figure 23: Leisure spending trends in past 12 months, by sector, October 2011
                                          • …and more pain to come
                                            • Figure 24: Leisure spending intentions for the next 12 months, October 2011
                                          • Up in smoke
                                            • Figure 25: Prevalence of cigarette smoking among adults, by age, 2005-09
                                            • Figure 26: Frequency of visiting nightclubs, by frequency of consuming cigarettes, 2011
                                          • Digital devices transform communication with clubbers
                                            • Figure 27: Device ownership of 16-24s and 25-34s compared to all adults, October 2011
                                          • Student numbers on rise but set to fall back in 2012?
                                            • Figure 28: Trends in the number of students at Higher Education establishments, 2005/06-2010/11
                                        • Competitive Context

                                          • Key points
                                            • Nightclubs market matches cinema in size
                                              • Figure 29: Value of the UK leisure* industry, by segment, 2006-11
                                            • Consumption of alcohol outside the home sees largest decline
                                              • Figure 30: Trends in consumption of alcoholic drinks once a month or more often, 2007-11
                                              • Figure 31: Visiting pubs/bars, restaurants and nightclubs, Q1 2007-Q2 2011
                                            • Where else do clubbers visit?
                                              • Figure 32: Frequency of participation in selected leisure activities, by nightclub visiting, 2011
                                          • Who’s Innovating?

                                            • Key points
                                              • Ex-Luminar boss goes into cabaret
                                                • Luminar increases focus on live music, laughs and early-evening trade
                                                  • Tokyo Nights
                                                    • Brook Leisure branches out
                                                      • Yellowhammer opts for Bliss-ful existence
                                                        • BYO Booze
                                                          • Harness the tech
                                                          • Market Size and Forecast

                                                            • Key points
                                                              • Rate of industry decline eases in 2011
                                                                • Figure 33: UK nightclubs admissions and revenues, 2006-16
                                                              • Forecast
                                                                • Figure 34: Value forecast for UK nightclubs industry, 2006-16
                                                            • Segment Performance

                                                              • Key points
                                                                • Revenue by segment
                                                                  • Figure 35: Luminar revenue, by segment, 2008/09-2010/11
                                                                  • Figure 36: Luminar revenue, by segment, 2008/09-2010/11
                                                              • Market Share

                                                                • Key points
                                                                  • Luminar still number one
                                                                    • Figure 37: Leading UK nightclub operators, by turnover*, January 2012
                                                                    • Figure 38: Leading UK nightclub operators, by number of clubs, January 2012
                                                                • Companies and Products

                                                                  • Key points
                                                                    • Industry structure
                                                                      • Figure 39: Numbers of nightclubs and discotheques in England and Wales, by region, December 2011
                                                                    • Major players
                                                                      • G1 Group (Holdings) plc
                                                                          • Figure 40: Financial performance of G1 Group (holdings) plc, 2007-11
                                                                        • The Luminar Group (Ranimul 2 Ltd)
                                                                            • Figure 41: Financial performance of Luminar Group Holdings plc, 2006-11
                                                                            • Figure 42: Revenue percentage for Luminar Group Holdings plc, by brand, 2010 and 2011
                                                                          • Novus Leisure
                                                                              • Figure 43: Financial performance of A3D2 ltd, 2010 and 2011
                                                                            • Tokyo Group Ltd
                                                                                • Figure 44: Financial performance of Tokyo Group ltd, 2008-10
                                                                              • Yellowhammer Bars Ltd
                                                                                  • Figure 45: Financial performance of Yellowhammer Bars ltd, 2009-11
                                                                              • Brand Communication and Promotion

                                                                                • Key points
                                                                                  • Traditional adspend fall reflects market decline and switch to social media
                                                                                    • Figure 46: Advertising expenditure for nightclubs and discotheques, 2007-11
                                                                                  • Luminar leads but switches focus
                                                                                    • Figure 47: Advertising expenditure for nightclubs and discotheques, by top 20 operators, 2007-11*
                                                                                  • Press and radio dominate spend
                                                                                    • Figure 48: Advertising expenditure for nightclubs and discotheques, 2007-11
                                                                                • Frequency of Visiting

                                                                                  • Key points
                                                                                    • One in five go clubbing monthly or more
                                                                                      • Figure 49: Frequency of nightclub visiting, November 2011
                                                                                    • Regular clubbers
                                                                                      • Occasional clubbers
                                                                                        • Infrequent clubbers
                                                                                        • Factors which Might Encourage People to Visit

                                                                                          • Key points
                                                                                            • Live music has strongest appeal for clubbers
                                                                                              • Figure 50: Factors which might encourage clubbers to visit clubs more often, November 2011
                                                                                            • Live music
                                                                                              • Inclusive deals
                                                                                                • Comedians
                                                                                                  • Different/unusual places
                                                                                                    • Nights for certain age groups
                                                                                                      • Live music and deals appeal most to regular clubbers
                                                                                                        • Figure 51: Factors which might encourage clubbers to visit clubs more often, by most popular frequency of nightclub visiting, November 2011
                                                                                                      • Live music and comedy are good bedfellows
                                                                                                        • Figure 52: Factors which might encourage clubbers to visit clubs more often, by most popular factors which might encourage clubbers to visit clubs more often, November 2011
                                                                                                        • Figure 53: Factors which might encourage clubbers to visit clubs more often, by next most popular factors which might encourage clubbers to visit clubs more often, November 2011
                                                                                                        • Figure 54: Factors which might encourage clubbers to visit clubs more often, by other factors which might encourage clubbers to visit clubs more often, November 2011
                                                                                                      • Live music and comedy most likely to encourage non-clubbers to start going
                                                                                                        • Figure 55: Factors which might encourage people to start visiting clubs, November 2011
                                                                                                    • Clubbers' Drinking Behaviour

                                                                                                      • Key points
                                                                                                        • Pre-loading is rife, particularly among youngest clubbers
                                                                                                          • Figure 56: Clubbers' drinking behaviour, November 2011
                                                                                                        • Pre-club drinkers
                                                                                                          • Home drinkers
                                                                                                            • Two thirds drink at pubs and bars before going on to a club
                                                                                                              • Figure 57: Clubbers' drinking behaviour, by clubbers' drinking behaviour, November 2011
                                                                                                            • Regular clubbers most likely to pre-load
                                                                                                              • Figure 58: Clubbers' drinking behaviour, by most popular frequency of nightclub visiting, November 2011
                                                                                                            • Live music, deals and comedians good ways of enticing people out of pubs/bars
                                                                                                              • Figure 59: Clubbers' drinking behaviour, by most popular factors which might encourage clubbers to visit clubs more often, November 2011
                                                                                                              • Figure 60: Clubbers' drinking behaviour, by next most popular factors which might encourage clubbers to visit clubs more often, November 2011
                                                                                                              • Figure 61: Clubbers' drinking behaviour, by other factors which might encourage clubbers to visit clubs more often, November 2011
                                                                                                          • Trends in Clubbing

                                                                                                            • Key points
                                                                                                              • Nearly six in ten clubbers going clubbing less often
                                                                                                                • Figure 62: Trends in clubbing, November 2011
                                                                                                              • Clubbers going less often
                                                                                                                • Clubbers going about the same
                                                                                                                  • Clubbers going more often
                                                                                                                    • Less frequent clubbers most likely to be going clubbing less
                                                                                                                      • Figure 63: Trends in clubbing, by most popular frequency of nightclub visiting, November 2011
                                                                                                                    • Home pre-loaders going less often likely to be for financial reasons
                                                                                                                      • Figure 64: Trends in clubbing, by clubbers' drinking behaviour, November 2011
                                                                                                                  • Club Spending Trends

                                                                                                                    • Key trends
                                                                                                                      • Half of clubbers spending less than a year ago
                                                                                                                        • Figure 65: Club spending trends, November 2011
                                                                                                                      • Clubbers spending less
                                                                                                                        • Clubbers spending the same
                                                                                                                          • Clubbers spending more
                                                                                                                            • Home pre-loaders again most likely to have cut back on spending
                                                                                                                              • Figure 66: Club spending trends, by clubbers' drinking behaviour, November 2011
                                                                                                                            • Financial considerations likely to be behind most of the declines in visiting
                                                                                                                              • Figure 67: Club spending trends, by trends in clubbing, November 2011
                                                                                                                          • Factors Influencing Choice of Nightclub

                                                                                                                            • Key points
                                                                                                                              • Queues by far the biggest issue for clubbers
                                                                                                                                • Figure 68: Factors influencing choice of one nightclub over another, November 2011
                                                                                                                              • Not queuing at the main door
                                                                                                                                • Not queuing for the toilets
                                                                                                                                  • Not queuing at the main bar
                                                                                                                                    • A guaranteed taxi/cab home
                                                                                                                                      • Exclusive room or pod
                                                                                                                                        • Door and bar particular issues for regular clubbers
                                                                                                                                          • Figure 69: Factors influencing choice of one nightclub over another, by most popular frequency of nightclub visiting, November 2011
                                                                                                                                      • Attitudes towards Dancing, Music, Nightclubs and Clubbing

                                                                                                                                        • Key points
                                                                                                                                          • Silence is Golden?
                                                                                                                                            • Figure 70: Attitudes towards dancing, music, nightclubs and clubbing, November 2011
                                                                                                                                          • Clear correlation between self-described dancing competence and visiting
                                                                                                                                            • Figure 71: Attitudes towards dancing, music, nightclubs and clubbing, by most popular frequency of nightclub visiting, November 2011
                                                                                                                                        • Nightclubs Target Groups

                                                                                                                                          • Key points
                                                                                                                                            • Figure 72: Nightclubs target groups, November 2011
                                                                                                                                          • Positive
                                                                                                                                            • Good Dancers
                                                                                                                                              • OK Dancers
                                                                                                                                                • Averse
                                                                                                                                                  • Disinterested
                                                                                                                                                  • Appendix – Broader Market Environment

                                                                                                                                                      • Figure 73: GDP, PDI, consumer expenditure and savings, at constant 2011 prices, 2006-16
                                                                                                                                                      • Figure 74: Trends in the age structure of the UK population, 2006-16
                                                                                                                                                      • Figure 75: UK unemployment rates, by age band (seasonally adjusted), Q3 2008-Q3 2011
                                                                                                                                                  • Appendix – Market Size and Forecast

                                                                                                                                                      • Figure 76: Value forecast for UK nightclubs industry, best and worst case scenarios, 2011-16
                                                                                                                                                  • Appendix – Frequency of Visiting

                                                                                                                                                      • Figure 77: Frequency of nightclub visiting, by demographics, November 2011
                                                                                                                                                      • Figure 78: Next most popular frequency of nightclub visiting, by demographics, November 2011
                                                                                                                                                      • Figure 79: Frequency of nightclub visiting, by financial situation at the moment, November 2011
                                                                                                                                                      • Figure 80: Frequency of nightclub visiting, by current financial situation compared a year ago, November 2011
                                                                                                                                                      • Figure 81: Frequency of nightclub visiting, by impact of the economic downturn on consumers, November 2011
                                                                                                                                                  • Appendix – Factors which Might Encourage People to Visit

                                                                                                                                                      • Figure 82: Most popular factors which might encourage clubbers to visit clubs more often, by demographics, November 2011
                                                                                                                                                      • Figure 83: Next most popular factors which might encourage clubbers to visit clubs more often, by demographics, November 2011
                                                                                                                                                      • Figure 84: Other factors which might encourage clubbers to visit clubs more often, by demographics, November 2011
                                                                                                                                                  • Appendix – Clubbers' Drinking Behaviour

                                                                                                                                                      • Figure 85: Clubbers' drinking behaviour, by demographics, November 2011
                                                                                                                                                  • Appendix – Trends in Clubbing

                                                                                                                                                      • Figure 86: Trends in clubbing, by demographics, November 2011
                                                                                                                                                  • Appendix – Club Spending Trends

                                                                                                                                                      • Figure 87: Club spending trends, by demographics, November 2011
                                                                                                                                                  • Appendix – Factors Influencing Choice of Nightclub

                                                                                                                                                      • Figure 88: ‘Not having to queue at the main door’ as a factor influencing choice of one nightclub over another, by demographics, November 2011
                                                                                                                                                      • Figure 89: ‘Not having to queue for the toilets’ as a factor influencing choice of one nightclub over another, by demographics, November 2011
                                                                                                                                                      • Figure 90: ‘Not having to queue at the main bar’ as a factor influencing choice of one nightclub over another, by demographics, November 2011
                                                                                                                                                      • Figure 91: ‘A guaranteed taxi/cab waiting when you leave’ as a factor influencing choice of one nightclub over another, by demographics, November 2011
                                                                                                                                                      • Figure 92: ‘Exclusive room or soundproofed pod in which to chat/relax/drink’ as a factor influencing choice of one nightclub over another, by demographics, November 2011
                                                                                                                                                      • Figure 93: ‘Being able to influence the music played’ as a factor influencing choice of one nightclub over another, by demographics, November 2011
                                                                                                                                                      • Figure 94: ‘Table service’ as a factor influencing choice of one nightclub over another, by demographics, November 2011
                                                                                                                                                      • Figure 95: ‘A cashless payment system using your mobile phone’ as a factor influencing choice of one nightclub over another, by demographics, November 2011
                                                                                                                                                      • Figure 96: ‘An exclusive area or floor for you and your friends to dance on’ as a factor influencing choice of one nightclub over another, by demographics, November 2011
                                                                                                                                                      • Figure 97: ‘Backstage access’ as a factor influencing choice of one nightclub over another, by demographics, November 2011
                                                                                                                                                      • Figure 98: ‘Free Wi-Fi in the club to share photos/videos while clubbing’ as a factor influencing choice of one nightclub over another, by demographics, November 2011
                                                                                                                                                      • Figure 99: ‘Photos of you with venue entertainers’ as a factor influencing choice of one nightclub over another, by demographics, November 2011
                                                                                                                                                      • Figure 100: ‘To be sent the DJ's playlist afterwards by text’ as a factor influencing choice of one nightclub over another, by demographics, November 2011
                                                                                                                                                      • Figure 101: ‘An opportunity to be the DJ for a fixed period’ as a factor influencing choice of one nightclub over another, by demographics, November 2011
                                                                                                                                                  • Appendix – Attitudes towards Dancing, Music, Nightclubs and Clubbing

                                                                                                                                                      • Figure 102: Most popular attitudes towards dancing, music, nightclubs and clubbing, by demographics, November 2011
                                                                                                                                                      • Figure 103: Next most popular attitudes towards dancing, music, nightclubs and clubbing, by demographics, November 2011
                                                                                                                                                      • Figure 104: Other attitudes towards dancing, music, nightclubs and clubbing, by demographics, November 2011
                                                                                                                                                      • Figure 105: Least popular attitudes towards dancing, music, nightclubs and clubbing, by demographics, November 2011
                                                                                                                                                      • Figure 106: Attitudes towards dancing, music, nightclubs and clubbing, by clubbers' drinking behaviour, November 2011
                                                                                                                                                  • Appendix – Nightclubs Target Groups

                                                                                                                                                      • Figure 107: Nightclubs target groups, by demographics, November 2011
                                                                                                                                                      • Figure 108: Frequency of nightclub visiting, by target groups, November 2011
                                                                                                                                                      • Figure 109: Attitudes towards dancing, music, nightclubs and clubbing, by target groups, November 2011
                                                                                                                                                      • Figure 110: Frequency of nightclub visiting, by target groups, November 2011

                                                                                                                                                  Companies Covered

                                                                                                                                                  • Banburys Ltd
                                                                                                                                                  • Brook Leisure
                                                                                                                                                  • Ernst & Young
                                                                                                                                                  • Gamestec
                                                                                                                                                  • Jongleurs Comedy Ltd
                                                                                                                                                  • Luminar plc
                                                                                                                                                  • Ministry of Sound
                                                                                                                                                  • Novus Leisure Ltd
                                                                                                                                                  • Utopian Leisure
                                                                                                                                                  • Yellowhammer Bars

                                                                                                                                                  Nightclubs - UK - January 2012

                                                                                                                                                  £1,995.00 (Excl.Tax)