Industry Analysis & Industry Trends
Competition and reduced alcohol consumption resulted in poor industry performance over the past five years. Industry operators will continue to contend with increasing competition from at-home alcohol consumption and other forms of entertainment over the five years to 2019. However, the improvement in the broader economy is expected to drive bar and nightclub spending, especially as establishments focus on ancillary product lines, like food services and live entertainment... purchase to read more
Industry Report - Industry Investment Chapter
IBISWorld estimates that for every $1.00 the industry spends on wages, $0.10 is required for capital equipment, including the use and replacement of buildings and fittings. As a result, the industry has a low degree of capital intensity given its dependency on labour to deliver services. Labour provides customer service in a variety of areas, including liquor and food sales, as well as entertainment services. As a result, the industry is relies more on labour than fixed capital.
Operators can significantly reduce their capital investment by renting or leasing establishments, rather than purchasing. In this case, an operator's rental expense will be far greater as a percentage of revenue than depreciation expense... purchase to read more