Consumers Skip Nightclubs and Sports Bars Despite Improving Finances

As RCI Hospitality Holdings sees sales at its gentlemen’s clubs and restaurants falter, it seems consumers’ years of pent-up demand have finally given way to their budgetary constraints, even as financial situations improve.

The nightclub and sports bar/restaurant company reported Tuesday (July 11) that same-store sales at its Bombshells restaurant, a sports bar chain where the servers are part of the appeal (think Hooters) fell more than 7% year over year. Meanwhile, same-store sales at its nightclubs, which are primarily gentlemen’s clubs, fell by a whopping 18%.

“Third quarter sales reflected the benefit of acquisitions, partially offset by macroeconomic uncertainty, which negatively affected same-store sales,” President and CEO Eric Langan said a in a press release.

The company’s release stated that the quarter marked the first same-store sales decline for the night clubs in more than two years, attributing the previous nine quarters’ increases to the post-quarantine boom. Now, however, it seems that budgetary pressures have outlasted consumers’ excitement to return to in-person activities.

RCI Hospitality declined PYMNTS’ request to comment.

Certainly, consumers are minding their spending. For instance, research from the May installment of PYMNTS’ Consumer Inflation Sentiment series, “Consumer Inflation Sentiment Report: Consumers Cut Back by Trading Down,” which drew from an April survey of more than 2,000 U.S. consumers, reveals that 69% have cut back on nonessential retail purchasing, and 57% are reining in nonessential grocery spending.

Yet financial hardship is lessening for many consumers. Research from PYMNTS’ recent study, the “New Reality Check: The Paycheck-To-Paycheck Report – Generational Divide Edition,” created in collaboration with LendingClub, which draws from a census-balanced survey of more than 3,000 U.S. consumers, reveals that the share of the population living paycheck to paycheck with issues paying bills is on the decline. As of May, it had fallen about 20%, from 19% of consumers in May 2022 to 15% in May 2023.

Indeed, restaurants are seeing consumers cutback on visits in the face of rising prices. Brands including Chili’s Grill & Bar and Cracker Barrel as well as, according to McDonald’s earlier this year, the whole quick-service restaurant (QSR) industry, have experienced challenges driving traffic.

Budget-related concerns will likely continue to impact consumers’ spending on dining and leisure going forward, given that the majority of the population expects that this inflationary period will last for some time to come According to data PYMNTS’ study “Consumer Inflation Sentiment: The False Appeal of Deal-Chasing Consumers,” for which we surveyed more than 2,100 U.S. adults, the average consumer does not expect inflation to return to normal until October of next year. As such, cost-conscious consumers tend to believe that there will continue to be a need to be more conservative with spending.

Additionally, the category that Bombshells is operating in seems to especially be facing difficulty. Take, for instance, Hooters of America’s closures, with the brand’s roughly 370 locations, per a recent press release, down significantly from 420 locations back in 2016, per a release at the time. One exception would be competitor Twin Peaks, which appears to be faring better, opening new locations and gearing up for its initial public offering (IPO).

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