If bad news comes in waves, then our industry — and specifically the sports themed segment — is getting rolled over by one mother of an ocean storm.
For the past year, we have covered story after story lamenting the sales declines, the cannibalization of full-service by fast casual, and the enormous staffing challenges that face all operators in the current economy.
This decline has been particularly hard on sports-themed operators as we have seen several high profile bankruptcies and worse-than-market sales reporting from some of our biggest players. What does all this mean for the future of the “sports bar” and is there anything you can do about it?
Who’s to blame?
The sales performance of full-service restaurant operators has been declining steadily for the past 18 months or so. In general, the entire segment is experiencing a shift in consumer tastes that is putting sports bars back on their heels.
Whether you have CEO’s claiming that discounting was their problem, too much inventory (ie: too many restaurants in operation) diluting the market, or a new consumer class (Millennials) that we haven’t mastered marketing for, everyone is scrambling each quarter when they have to face investors on their earning calls. Sports-themed chains have particularly been hard hit.
Fox & Hounds and Ignite restaurants recently declared bankruptcy. Buffalo Wild Wings has experienced a proxy fight causing a search for a new CEO amidst declining sales. Other outlets have closed locations over the past 18 months, too. A recent NRN article observed that these declines may be related to the lackluster ratings performance of the NFL. While that may be true, it’s equally as likely that the pervasion of available ways to consume games is the culprit. Folks that want to watch their favorite teams are no longer forced to a restaurant; they have their own HD device right in their pocket.
Just the pervasion of big-ass flat screens at incredibly cheap prices has impacted traffic. When you are competing with someone’s living room, you can’t beat them on price or convenience — and frankly, they know the exact condition of the bathroom before they visit it. Plus, the amount of content that consumers have access to, coupled with new ways of consuming it, isn’t helping sports bar. This confluence of change has put many of our sports-themed brethren in dire straits.
A changing landscape for sports bars
One thing is clear. The times they are a-changin’, and we as an industry have to determine our response. A recent post we featured asked the question, “Are Sports Bars Dead?” The writer correctly observes that the industry hasn’t evolved much from its beginnings in the late-‘80s to now. Menus are predominantly the same with a focus on wings, pizza, fried foods, and less than creative fare.
While some in our industry have evolved their beer offerings, many are still delivering the same mix of national production beers with a smattering of “craft beers.” The quotes around craft beers is due to the fact that most operators think having Sam Adams and Sierra Nevada will satisfy their new dominant consumer base — Millennials.
While we don’t want to blame this whole seismic shift on just the developing consumer influence of this specific population, Millennials are surely having an impact. The generation is basically the sweet spot for sports bar demographics, 20-39 year olds.
Yet, the way Millennials consume EVERYTHING is different than their predecessors and they will likely set the tone for years to come. If you aren’t tailoring your operation to satisfy them, then you are likely seeing sales declines as Baby Boomers become older and live on fixed incomes, and Gen X’ers are busy raising families.
So, are sports bars dead?
Given the news we just reviewed, it’s a fair question. While we believe the answer is no, we also understand that there is much to do if the sports-themed segment wants to remain relevant.
We are considering a roundtable that focuses on our core vertical of sports-themed restaurants and bars. If you have some ideas about the direction we are going, please leave me a note in the comments below or shoot us an email. Our goal is to get as much input as we can from our subscribers to develop a program that bring value and help us all prepare for the continuing changes ahead.