To be fair this trend started before Gen Z was born. I first remember reading about it in the 2000 book Bowling Alone by Robert Putnam. It kind of went from people still going out but being less social and less likely to be part of groups to not really going out much at all.
There’s also the chicken or the egg question about third spaces. Young people are spending less and less time in them, but there are also significant less third spaces available to them. Many spaces and businesses are either much more expensive or not built for longer periods of time spent there.
The other major shift is people, particularly younger generations, becoming more health conscious. I tend to think this is at least as big of a factor, but at the very least it is one of the factors Contributing to the reduction in the alcohol industry in addition to the socialization/third space changes.