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Topic: Concession Per Caps?

Jason Burroughs
Jedi Master Film Handler

Posts: 654
From: Allen, TX
Registered: Jun 99

posted 06-06-2009 05:08 PM

Don't forget theme parks.

You can really jack the prices up when you have a "captive" audience. Nothing like [sex]

your customers [Smile]

Best comparison for Per-Cap is that of other theaters in the area, and within the same chain.

Best way to improve Per-Cap is to offer good products at a reasonable price, and also provide something unique.

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Mike Blakesley
Film God

Posts: 12767
From: Forsyth, Montana
Registered: Jun 99

posted 06-06-2009 09:06 PM

I don't think theme park prices are so bad. After all, they have to continually invest millions of dollars in new attractions. I think the worst prices are at pro sports events. What is it, like 6 or 7 bucks for a hot dog?

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Michael McGovern
Film Handler

Posts: 57
From: New Britain, CT, USA
Registered: May 2008

posted 06-06-2009 09:26 PM

Ok, so the convenience store comparison was bad, but my overall point was that the profit margins on concessions are so high, that it probably would do some places better to lower the prices and sell more then to keep them as high as they are.

I can actually understand the high prices at the stadiums, I can only imagine what the overhead cost to run a building like that must be between utilities, maintenance, labor, etc., it must be outrageous.

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Anslem Rayburn
Master Film Handler

Posts: 476
From: Yuma, AZ, USA
Registered: May 2002

posted 06-07-2009 01:31 PM

quote: Mike Blakesley
I don't think theme park prices are so bad. After all, they have to continually invest millions of dollars in new attractions. I think the worst prices are at pro sports events. What is it, like 6 or 7 bucks for a hot dog?

But they have to continually invest millions of dollars in new players.

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Lyle Romer
Phenomenal Film Handler

Posts: 1400
From: Davie, FL, USA
Registered: May 2002

posted 06-08-2009 12:14 PM

quote: Michael McGovern
Ok, so the convenience store comparison was bad, but my overall point was that the profit margins on concessions are so high, that it probably would do some places better to lower the prices and sell more then to keep them as high as they are.

Here's why it doesn't make sense to lower the prices to sell more. In order to actually sell more you will have to SIGNIFICANTLY lower the prices. Somebody that won't pay $4 for a popcorn isn't going to suddenly see $3.50 and say "Now I'm going to buy a popcorn". So let's say you have a $3.00 per cap now and your food cost is 20% so you have a gross profit of $2.40 per person.

Now pretend you cut your prices in half and get the per cap up to $4.00. Now your food cost is 40% so your gross profit is still $2.40 per person AND you have to pay more staff to sell and clean up (since you are selling more quantity of food). So, your net profit will actually drop.

If halving the price only raised the per cap to $3.50 or $3.75 you will make less gross profit to start with.

Concession prices are not a place where you can make higher profit by lower margins to increase overall profit by increasing volume. You are much better off keeping admission prices as low as you can to get more people in the building to buy concession at the high prices.

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Troy Hilsman Powell
Film Handler

Posts: 30
From: Jacksonville,FL
Registered: May 2007

posted 06-08-2009 07:37 PM

When we ran the playtime drive in it was a 3 screener and it only pulled an average 2.01 PC but I expanded the menu choice greatly and it pulled 5.80 PC. It is more than just serving popcorn,candy and pop anymore, well at a D I anyway. Bottom line is you have to listen to what your customers want no matter what the cost. Believe me it WILL pay off. I am living proof. just look at my waistline. Weekdays we brought in 1900 dollars and weekends we would pull in 3500. Choice is the matter.

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Ramin Hashemi
Expert Film Handler

Posts: 129
From: Houston TX
Registered: Sep 2004

posted 07-08-2009 04:33 PM

Our per cap averages close to $4.

To add to Mike's comment, Theater concession needs to be higher because of higher operating costs. Look at it this way, with so many theatres in large markets (with large competition), you would think price of popcorn would fall IF it could.

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Ron Funderburg
Jedi Master Film Handler

Posts: 814
From: Chickasha, Oklahoma, USA
Registered: Nov 2007

posted 07-10-2009 11:52 AM

Funny story but true!

Back in the early 80's I ran a theater for Commonwealth in the Denver market. We usually ran 2.60 to 2.90 per cap but one Saturday we had 4 shows that were nearly all sell outs on all screens. Way more people than usual and thus the concession stand was stressed to handle all the people and the per head was lower than usual in 2.40 range.

It was the biggest day for total take I had had in a long but the City Manager called me and said my per head was a little low should really train my people better.

On a Wednesday a few weeks later we had a dreadful day but we had a church group come in and they all bought concessions so we had a $6.00 per head on the concession stand that day. City Manager calls and says congratulations on the per head last night great work with your people.

I had to laugh and explained it to him and that we were far better off with the lower per head and record breaking day than a record breaking per head and not many people.

He said "WHAT?"

I said "Never mind thanks we are trying!"

To add to the current line of discussion I agree that concession need to be higher than most customers are comfortable with. You have to make most of your payments out of this money, including staff.

While concession make up less of the total take than tickets they account for more profit and pay more of the bills. Film company taking their cut off the top of the ticket eats up a lot of that money right out of the gate. Ticket money that is left is eaten up with lease and loan payments.

So concessions rule!

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Martin Brooks
Jedi Master Film Handler

Posts: 900
From: Forest Hills, NY, USA
Registered: May 2002

posted 07-10-2009 03:23 PM

quote: Lyle Romer
Here's why it doesn't make sense to lower the prices to sell more. In order to actually sell more you will have to SIGNIFICANTLY lower the prices. Somebody that won't pay $4 for a popcorn isn't going to suddenly see $3.50 and say "Now I'm going to buy a popcorn". So let's say you have a $3.00 per cap now and your food cost is 20% so you have a gross profit of $2.40 per person.

Now pretend you cut your prices in half and get the per cap up to $4.00. Now your food cost is 40% so your gross profit is still $2.40 per person AND you have to pay more staff to sell and clean up (since you are selling more quantity of food). So, your net profit will actually drop.

If halving the price only raised the per cap to $3.50 or $3.75 you will make less gross profit to start with.

Concession prices are not a place where you can make higher profit by lower margins to increase overall profit by increasing volume. You are much better off keeping admission prices as low as you can to get more people in the building to buy concession at the high prices.

I can't prove that you're incorrect, but I disagree with your logic. What percentage of your customers buy any concessions at all? At the theatres I attend, I bet it's definitely under 25%. I live in NYC and concession prices are completely absurd. So if 75% of your audience is not buying concessions, you've got a problem. The margin on popcorn and drinks should be high enough that you can substantially lower prices and if you get another 25% of the audience to purchase, you should do far more than make up the difference.

Personally, unless I'm on a date, I won't buy any concessions. I'm willing to pay an upcharge at a movie theater, but $3.00 for a tiny Coke or $6.00 for popcorn is absurd and it makes me angry. And yes, I get just as angry at ballparks or arenas that rip you off as well. In fact I get angrier in those venues because admission prices are so high: I pay $100 to see a concert and you have the nerve to charge me $13 for a hot dog and small drink? They may get it because it's a captive audience, but it's a false economy because when you leave such a bad taste in someone's mouth (and not just from the cruddy quality of the food), they're less likely to return often. If you're selling out every event, no problem. But if you have empty seats, then you're leaving money on the table and making your customers hate you.

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Carl Martin
Phenomenal Film Handler

Posts: 1424
From: Oakland, CA, USA
Registered: Feb 2002

posted 07-11-2009 02:40 AM

quote: Ron Funderburg
concession need to be higher than most customers are comfortable with. You have to make most of your payments out of this money, including staff.

While concession make up less of the total take than tickets they account for more profit and pay more of the bills. Film company taking their cut off the top of the ticket eats up a lot of that money right out of the gate. Ticket money that is left is eaten up with lease and loan payments.

money is money. if you fail to sell concessions that doesn't mean that you don't pay the staff.

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Justin Hamaker
Film God

Posts: 2253
From: Lakeport, CA USA
Registered: Jan 2004

posted 07-11-2009 04:25 AM

Martin, you have to remember that the price you pay for an item anywhere is more than just the direct cost of the item (food cost, labor, equipment, etc). The cost also includes overhead which includes things like utilities, leases and mortgages, insurance, and any other costs that can't be easily allocated to a specific item.

When you go to a convenience store or fast food restaurant and buy a 32oz soda, you are paying for a much smaller overhead than with a theatre.

Places like grocery stores might sell a similar fountain drink for $1.00, but that's because the volume for all items is so much higher, they can make their "nut" with much smaller margins. The grocery store can make a $10,000 gross profit selling 100,000 items with a 10¢ markup. The theatre would need to get that same $10,000 from maybe 5000 items - requiring a $2.00 markup.

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Ron Funderburg
Jedi Master Film Handler

Posts: 814
From: Chickasha, Oklahoma, USA
Registered: Nov 2007

posted 07-22-2009 06:18 PM

quote: Carl Martin
money is money. if you fail to sell concessions that doesn't mean that you don't pay the staff.

Actually if you don't sell concessions it does mean you can't pay your staff or much of anything else. If you don't sell concession your in deep yogurt in this business.

Also in the instance of sales tax money is then money is not just money. The money collected for sales tax is not the theaters at any point it never belongs to the theater at all it is held in trust by you for the state.

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Carl Martin
Phenomenal Film Handler

Posts: 1424
From: Oakland, CA, USA
Registered: Feb 2002

posted 07-25-2009 04:23 AM

my point was that you don't pay some bills out of one pool of money and others out of another. all money looks the same.

as for the second paragraph, i can't make heads or tails of it.

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Justin Hamaker
Film God

Posts: 2253
From: Lakeport, CA USA
Registered: Jan 2004

posted 07-25-2009 06:03 AM

Carl
The point is not that you pay different bills out of different pools of money. The point was that if you don't generate enough income from the snack bar, your pool of money isn't big enough to pay your bills. Period.

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Mike Spaeth
Phenomenal Film Handler

Posts: 1129
From: Marietta, GA
Registered: Jul 2000

posted 07-30-2009 11:16 PM

You aren't going to triple your sales quantity by cutting your prices in 1/3, so why would you do it?

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