Students pre-drinking and not going out mid-week is to blame for nightclubs closing, the boss of the UK's biggest club chain has said.
Earlier this month, Pryzm and Atik owner Rekom announced the closure of 17 venues with the loss of 500 jobs. Its boss Peter Marks said students hit by the cost of living crisis were cutting back on clubbing. But experts said young people drinking less and a more diverse choice of night time entertainment also had an impact.
It comes as new data suggests close to 400 clubs permanently shut down between March 2020 and December 2023, according to the Night Time Industries Association (NTIA).
The NTIA said this equated to 10 closures per month and two per week.
Pryzm clubs in Birmingham, Leeds, Nottingham, Portsmouth, Plymouth and Watford are among those to have shut in 2024, along with Atik nightclubs in Dartford, Romford, Windsor and Wrexham. Speaking to the BBC, Mr Marks said cost of living pressures were “singularly the biggest issue that we face”.
He said students were going out later and spending less, making it very difficult for the nightclub industry. But experts say young people drinking less and more places for them to socialise likely had an impact.
“In recent years, lots of research – some of which predates the cost of living crisis – has suggested that young people are drinking less alcohol,” said Tom Allingham from money advice group Save the Student.
“The cost-of-living crisis means students also don't have the time to see friends,” Chloe Field from the NUS added.
“65% of students [according to a recent NUS survey] who work are working more than they did last year. This means that, between full-time study and part-time work, many can't socialise at all,” Ms Field said.
Traditionally, Rekom's biggest earners were large nightclubs in city centres geared to the student market. But during a midweek visit to Leeds last month, the group's chief executive Mr Marks said he could see the problem.
“I walked around between 7pm and 11pm, and there were no more than 200 people out in the city. Two years before, it would have been really quite busy and buzzing,” he explained. The nightclub chain has also had to contend with rising bills and rent and having to raise staff pay in line with the National Living Wage.
“For every £100 pounds we take, we are spending between £30 and £40 on wages,” he said.
“We've had businesses that used to make £500,000 then go on to lose £400,000. Just in the two-year period,” Mr Marks explained.
‘Other places to spend money' Retail analyst Catherine Shuttleworth said Rekom's problems were a result of young people having more choice on where to spend their money.
“There are bars with darts and golf, many more food options and lots of pop up stuff – especially in summer,” she said.
“The behaviour of young people has also changed since the pandemic, with those who turned 18 in lockdown not getting into the habit of going out clubbing,” she added. The drinking habits of those who've recently turned 18 appear to be changing too. The latest figures from the NHS suggest a third of people under 25 have not drunk alcohol for at least a year.
Supermarket Tesco said demand for no and low alcohol beer has increased by more than 20%, while sales of no/low wine rose by nearly 15%. Demand for alternatives to alcoholic spirits grew by nearly 10%, the supermarket said.
According to DrinkAware, those least likely to drink are aged 16 to 24 and 26% of that age group do not drink alcohol at all. Speaking to the BBC, the Rekom boss urged the government to reduce VAT rates to ease the pressure on the hospitality industry.
“The night time economy is going through a tough time. It does need some help. I believe the only sort of help that is material and will make the difference is actually a VAT cut to 10%,” he said.
— CutC by bbc.com
