Rekom, Northern Europe’s largest nightclub company, heads up brands including PRYZM, Proud Mary, Cameo and ATIK in the UK.
Recent research commissioned by the late-night nightclub goliath showed that the cost-of-living crisis was continuing to impact Brits’ social lives, with more than a third (34.9%) cutting back on the number of times they go on nights out since autumn 2022.
What’s more, nearly half (49.6%) of those said this was as a result of increased general living costs, as well as expensive bills (42.8%) and the need to save any spare disposable income (33%).
Marks doesn’t buy that this is a trend, or something sparked by young people falling out of love with drinking.
Trends never last long, he explains, but these are habits with deep roots. Trade markedly dropped off in November 2022 following the mad rush of freshers month and Halloween.
Early week trade (Mondays, Tuesdays, Wednesdays), previously a big driver of business, is where the operator has been hit hardest.
“I feel for them,” says Marks, referring to the students. After four years of Covid thwarted the university experience, finally normality returns only for students to find there’s just no money at the end of the week. “What an awful shame.”
Most part-time staff at Rekom were students, who Marks emphasises with. But he also thinks it’s a sad thing for society. “The social aspect of [going to university] isn’t there at the moment in the same way it was before.”
In the Rekom survey, increased rent came out as a main concern for more than a fifth (21.19%) of those aged 24 to 34.
Pricing remains the most important factor for consumers when deciding whether to go on a night out, and this fact has increased by 6% since the last Rekom Night Index in March 2023.
Other top priorities for people when choosing a venue to go out included cheap or no entry fee (27.8%) and good value drinks (27%).
Prioritising value
So how is Rekom adapting to suit shifting habits? By focusing more on value. It does this by cutting back on expensive entertainment, introducing cheaper deals pre-11 o’clock, as well as making sure this value is clear in social media messaging.
While clubbers are coming out less often, when they do come out, Marks points out that they spend more.
Students often sack off midweek nights out to go all out on a Friday. But they’re not going out every week, and they’re looking for better value. “It’s up to us to respond accordingly,” says Marks.
The focus, now, is on making sure the business continues to offer the best it can in what is a very difficult market.
But what does responding accordingly look like? “As always,” advises Marks, “you’ve got to stick to what you’re good at and what you’re about and not try to be everything to everybody.
“We are a nightclub, we’re brilliant with that great atmosphere. Most of our clubs are the largest club in the city that they’re in. So we’ve got to fill that space. But we also recognise it’s harder right now to do that just by doing the basics.”
Rekom adds layers to its club nights, like Bongo’s Bingo and comedy, then works with local promoters to build up the event.
“You’ve got to stick to what you’re good at and what you’re about and not try to be everything to everybody"
The chairman adds: “Right now, more important than ever, you have a situation where you can’t just open the door and see who comes. That’s just not the game.”
He’s adamant about one thing: students love socialising, "and that’s what we must tap into and must never forget, and we’ve always been really good at it,” he says.
However, he admits that he’s feeling more cautious than he’s been for a while about the future of business. Looking forward, he says: “As a company, we’ve just got to widen our demographic appeal and our trading window.”
On the bright side, the operator’s bars and pubs, which cater to a broader age range, have “pretty much held up”.
This comes after Rekom’s report revealed full time employees are able to spend more than students (£99.78 compared to £79.01) on an average night out.
Setting a high bar
“We ended up with corporate schizophrenia”, adds Marks. Rekom UK’s second pub, Proud Mary, launched in Swansea last week.
The first one’s doing “really well” in Cardiff, he shares, and the Heidis Bier bars in Cardiff and Birmingham are “trading fantastically”.
Rekom wants to grow more into the bar market. But tough trading in its core estate paired with difficulty in securing funding meant it hasn’t got as far with this plan as Marks has wanted: He says: “We’ve got to focus our future on those broader demographics and trading windows.
“But there’s always going to be a need for people to go out, and you’ve just got to adapt your offer.”
Rekom fears young people are the most disadvantaged in today’s current climate. The survey revealed that spending time with friends continues to be the most popular reason for going on a night out (61.4%), but with financial pressures being the main obstacle to choosing whether to go out, people’s social lives are taking a hit.
Rekom UK executive director Russell Quelch added that the late-night sector must adapt and evolve as a result of the changing behaviours.
He said: “There are definitely opportunities out there – it’s all about having the right strategy and proposition at the right time and engaging with the market. These factors are even more important during tough economic times where disposable income is lower than ever before.”
