Britain’s biggest nightclub operator said today that cash-strapped clubbers were going out less as they face up to “one of the most difficult years in recent times”.
Luminar, which owns the Oceana, Lava & Ignite and Liquid chains, said it had seen a sharp drop-off in the number of revellers as the economic downturn and rising price of fuel has hit them deep in the pocket.
The group also blamed the recent Euro 2008 football tournament, this summer’s better weather and the disruption caused by a refurbishment programme for a 2.4% slide in like-for-like sales in the past 19 weeks.
Comparable sales at its branded clubs rose 1.9%, but this marks a steep decline on the 14.4% hike seen last year.
It is also down heavily on the 7.5% rise seen in the previous 10 weeks.
Milton-Keynes-based Luminar said in May that its target 18-30 age customers were shrugging off the credit crunch with a “living more for today” attitude.
But while many of its clubbers do not have mortgages, which has sheltered them from much of the credit squeeze, they do have cars and are now feeling the pinch from soaring petrol bills, according to the group.
It is planning a raft of price promotions across its 54 branded and 30 non-branded clubs to lure in cash-strapped customers midweek, as well as running themed nights, such as alcohol-free under 17s nights and “vibe” nights aimed at urban-music fans.
Luminar is also reviewing costs across the group, although it is unclear how its 2,000 staff will be affected.
“This current financial year is set to be one of the most difficult in recent times for our consumers, as amongst other things the unprecedented hike in fuel costs is affecting their disposable income,” said Luminar.
But it added it hoped to emerge “a stronger business” as the tough conditions are expected to see off many of its late night entertainment rivals.
The group is undertaking a series of acquisitions, disposals and refurbishments aimed at leaving it with 74 branded clubs in an 110-strong estate by 2011.
It has opened three branded clubs in recent months – an Oceana in Swansea, and Liquid clubs in Swindon and Basildon.
It also completed 10 refurbishments since February 29, which it said put pressure on sales. Like-for-like sales rose 2.8% for its branded clubs and by 0.2% in total in the period, excluding the impact of the refits, Luminar said.
Shares fell 5% on news of the sales drop and after analysts at Panmure Gordon trimmed their growth forecasts.
But a Panmure note added that all consumer-facing businesses were under profit pressure and Luminar was “well-placed to survive”.