Film-Tech Forum ARCHIVE: Concession Per Caps?

This is topic Concession Per Caps? in forum Ground Level at Film-Tech Forum ARCHIVE.

To visit this topic, use this URL:
https://ft-forum.com/ft/cgi-bin/ubb/ultimatebb.cgi?ubb=get_topic;f=5;t=002228

Posted by Bob Jones (Member # 1756) on 06-03-2009, 01:45 AM:

Hey Folks - Just wanted to try and get a feel on what concession caps are running these days. Looking over the published data from the annual reports of the public circuits -- it looked like 2008 was in the $3.25 range.

Any thoughts?

Thanks-
Bob

Posted by Monte L Fullmer (Member # 2797) on 06-03-2009, 02:19 AM:

I've seen some below 2 bucks and some that hit well over 5 .. all depends of the market-which part of the country you're in along with what kind of manager is running that location,

Posted by James Westbrook (Member # 3690) on 06-03-2009, 03:00 AM:

Drive-in theatres have a higher percap because they sell more food items.
First-run theatres will have a higher percap because customers who can afford to get in there can usually afford to buy the large tub of popcorn and the large soda. The sub-run theatres have a lower percap, as a rule.
Theatre by theatre, city by city, location by location, your mileage will vary.

Posted by Martin McCaffery (Member # 37) on 06-03-2009, 09:43 AM:

Our percap double when we started selling beer and wine;> Still only about $1.50.

And percap is pretty meaningless if no one is coming to the movie.

Posted by John Henry (Member # 3084) on 06-03-2009, 10:36 AM:

We usually get $3.00 to $3.50 on weekends and $2.75 on weekdays.

Posted by Adam Holland (Member # 4539) on 06-03-2009, 06:51 PM:

Here at a single screen first run theatre in Oak Grove, La. we run a concession per cap at around $2.50 per person. However our prices are $1.50 for a Coke, $1.50 for a small popcorn, $4 for a large popcorn and $1.50 for candy.

Posted by Mike Blakesley (Member # 26) on 06-03-2009, 07:06 PM:

We run around $3 to $3.25 depending on the movie.

Posted by Bob Jones (Member # 1756) on 06-04-2009, 01:11 AM:

Thanks folks - I guess I should have been a little more specific. I was inquiring about a typical 14-16 screen multiplex in a medium-size market - with prices commensurate with a typical national circuit.

Also - I thought it was interesting that somebody mentioned a Drive-In -- what are the typical per caps from Drive-Ins during the most popular times of the season. Are folking really hamburgers and fries -- or is bringing food in more of a problem?

thanks

Posted by Justin Hamaker (Member # 2165) on 06-05-2009, 10:10 AM:

We normally run about $4.10-$4.15. If our top movie skews toward seniors, it will dip to about $3.75.

For what it's worth, here are our popcorn and drink prices
Popcorn: $6.00, $5.50, $4.50, $3.50
Soda: $4.50, $4.00, $3.25, $2.75

Posted by Adam Fraser (Member # 1074) on 06-05-2009, 04:07 PM:

We are usually between $2.50-$4.00 depending on the film. First/sub run single screen in a town that has many seniors.

Our prices:

Popcorn: 46 oz- $2.00 85 oz. $3.50 130 oz. $5.00
Candy: Small- $1.50 Medium $2.50 Large $3.00
Pop: Small- $2.00 Med. $3.00 Large $4.00

Posted by Michael McGovern (Member # 4807) on 06-05-2009, 08:26 PM:

My belief has always been that Per Cap is a bell curve, and once you raise your prices too high you're doing yourself more harm then good, the sales your losing due to the high prices isn't being offset by the people left who are paying the high prices. This is a lesson that the chains don't seem to understand. Regal on the whole has the highest concession prices in the industry it seems, and their popcorn and drink sizes are outrageously large, while their candy sizes are significantly smaller than everywhere else. If 7-11 can sell a 64oz Fountain Drink for a $1.75 and still make a profit, there's no reason at all that you need to charge $7 for for a 52oz drink at the movies.

I know the concession stand is where we make all our money (although with the amount of advertising deals the chains have now, that may be debatable), but has anyone ever tried radically lower concession prices to see if the increase in sales leads to a higher overall profit, or am I living in la-la land? Do people simply do not care about the prices and pay them regardless? Sometimes I can't really tell.

One thing I have noticed however is that the advent of 3-D Films definitely eats into concession purchases. The surcharge now raises matinee tickets by an additional 50%, so it now costs people close to 50 dollars to take the family out to the movies, when previously it could be done for 25 or less. When people are paying this much at the box office, they simply don't have the money to stop at the stand anymore, and per-caps suffer. Previously the 3-D technology was mostly relegated to larger urban areas, people had to go out of their way to get the the one AMC or one Regal that had the 3-D film, so once they got there, they knew what they were getting into price wise, so it wasn't a problem. Now that the 3-D technology is becoming more common, and theaters in less affluent areas have the projectors, this is definitely going to become a larger issue. If people have to make a day trip to get to the theater showing the 3-D film, they'll spend the money, but if they can just go to the theater down the street, they will definitely be less apt to do so.

Posted by Bob Jones (Member # 1756) on 06-05-2009, 11:57 PM:

Good comments - thanks all -- Michael it interesting to read your take on the effects of 3D to concessions - and it makes sense. Would be interesting to see if anything has actually done more study on that.

Posted by Mike Blakesley (Member # 26) on 06-05-2009, 11:57 PM:

quote: Michael McGovern
If 7-11 can sell a 64oz Fountain Drink for a $1.75 and still make a profit, there's no reason at all that you need to charge $7 for for a 52oz drink at the movies.

That's a completely different business model. 7-11 has 24/7 to sell their stuff; they have many other higher profit products to offset the "loss leader" sodas (and basically gasoline); and a little dumpy convenience store doesn't have near the operating expenses of a big cinema complex.

Posted by Jim Bedford (Member # 4) on 06-06-2009, 09:12 AM:

Mike's got it. When it comes to food, the basic similarity between the movie business and convenience stores is that they are on the same planet.

Posted by Mike Spaeth (Member # 524) on 06-06-2009, 11:19 AM:

The convenience store is a bad example. You will pay $5.50-$6.00 for a stick of deodorant that you could buy at Walgreens for $2.50 or $3.00. How dare those greedy owners rip off the public like that!

Posted by Jason Burroughs (Member # 68) on 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.

Posted by Mike Blakesley (Member # 26) on 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?

Posted by Michael McGovern (Member # 4807) on 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.

Posted by Anslem Rayburn (Member # 1267) on 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.

Posted by Lyle Romer (Member # 1266) on 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.

Posted by Troy Hilsman Powell (Member # 4326) on 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.

Posted by Ramin Hashemi (Member # 2694) on 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.

Posted by Ron Funderburg (Member # 4561) on 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!

Posted by Martin Brooks (Member # 1269) on 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.

Posted by Carl Martin (Member # 1146) on 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.

Posted by Justin Hamaker (Member # 2165) on 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.

Posted by Ron Funderburg (Member # 4561) on 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.

Posted by Carl Martin (Member # 1146) on 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.

Posted by Justin Hamaker (Member # 2165) on 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.

Posted by Mike Spaeth (Member # 524) on 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?

Posted by Mike Blakesley (Member # 26) on 07-31-2009, 01:28 AM:

I think a lot of people sneak stuff in because they can't buy exactly what they want in the concession stand. We hardly ever have anyone sneak in Pepsi products; but we see a lot of Coke, iced tea, latte and etc...all stuff we don't sell. Our prices are pretty low so we don't get many price complaints.

Posted by Kenneth Wuepper (Member # 1174) on 07-31-2009, 05:59 AM:

Mike,

Is your janitor doing your marketing research, or what?

You have a great opportunity to see what people are really craving so why not try a couple of the most popular "sneaked" products at the concession stand?

I also think that bringing in food and drink items is a little game on the part of the audience. They just like to see what they can get past your cinema security.

KEN

Posted by Mike Blakesley (Member # 26) on 08-01-2009, 09:39 PM:

I'd say the most "sneaked" products are:

- Coke products (we sell Pepsi, so can't really do anything about that)

- Energy drinks in giant plastic bottles (we already sell energy drinks in cans)

- Lattes or ice-cream related stuff from the coffee shop or the Dairy Queen (haven't got the space to get into those things)

- Great big bottles of stuff we already sell.

And it doesn't happen all that often - we probably only find three or four items on a busy night, if that.

Posted by Fred Schoenfeld (Member # 2632) on 08-04-2009, 11:11 PM:

Maybe this is not the right place to post our per cap, but I operate a first run, historic single screen, downtown theatre where we serve full meals in the auditorium, including beer & wine. Our average per cap is over $16.00 and sometimes exceeds $18.00! Only the pizzas exceed $10. Full food service is certainly the way to go in a single screen operation!!

Posted by Christopher Crouch (Member # 3784) on 08-06-2009, 06:27 AM:

quote: Mike Blakesley
I think a lot of people sneak stuff in because they can't buy exactly what they want in the concession stand.

It depends on the market. The theatre I currently manage has a huge problem with outside food and much of what we encounter mirrors what is sold in the stand. The theatre is located in an upscale area (customer base featuring doctors, lawyers, etc.), so it's not necissarily a price issue either. Due to the outrage and threats voiced, almost every time we stop outside food items, I've come to suspect our problem is related to a general sense of entitlement by the customers in question (i.e. many having an "I'm special and don't have to follow your rules" attitude). I've actually had customers call the police after we declined their outside popcorn, drink, etc. Interestingly, I've had more outside food/drink and low percap issues at theatres located in affluent areas, than at those located in middle to low income markets.

Posted by Martin Brooks (Member # 1269) on 08-14-2009, 12:51 PM:

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

Obviously, but this is a study in optimization not unlike the optimizations that airlines (and other industries) do to place passengers in seats at various prices depending upon when they buy.

So there is an optimized price for concessions that maximizes total profit (not margin). A number of companies sell software that works out these optimizations if fed enough data. I happen to work for one which does it for the Ad Sales industry and it generally increases profits 2-12%. (We hired a bunch of NYU mathematicians to figure the whole thing out.) An individual theatre could not afford such software, but a chain might, especially a large one.

Posted by Joe Redifer (Member # 3) on 08-20-2009, 07:58 PM:

We try to reach or exceed $2 when it is busy, but it is usually below that.

I don't understand how most other theaters in the area have per caps of $3-$4, yet we sell a larger variety of stuff and have far fewer customers. Our per cap should be $10!

quote:
Full food service is certainly the way to go in a single screen operation!!

But you have more overhead in that big room called the kitchen.

Posted by Mike Blakesley (Member # 26) on 08-21-2009, 12:04 AM:

Yeah, or maybe (like us) you don't have any room for a kitchen!

Posted by Jack Ondracek (Member # 1466) on 08-21-2009, 01:37 AM:

The problem I see with concession pricing is that theatres gouge to the point that the offense is memorable.

I understand that the theatre concessions is sort of a "specialty", and I try to look at it the same way I do when willingly paying $6 for a beer at the ballpark.

However, when I buy a big box of candy for $5, and inside is a little plastic bag that wouldn't go for more than 50 cents at a 7-11, the insult makes me tend to side with the people who do sneak their stuff in.

I recently took my daughter to see a film in "Digital 3-D". The theater is new and the experience was decent. However, after $21 to get in and $17 for a popcorn, Coke and nachos, it's not something I would do very often.

Unfortunately, people tend to assume that smaller indies rape and pillage their customers too, at least until they give them a a chance to show otherwise.

We have a local theatre with something like 8 sales positions at the counter, 2 huge popcorn machines and 4 Coke towers. I've never seen a time when there were more than 2 cashiers back there, mostly watching people bypass them.

Posted by Mike Blakesley (Member # 26) on 08-21-2009, 12:35 PM:

Hmm, maybe if EVERYONE would buy their snacks instead of sneaking them in, the theatres would make more money and could lower the prices. I realize neither thing will ever happen.

Posted by Joe Redifer (Member # 3) on 08-21-2009, 03:06 PM:

Even if people bought everything at the theater, concession prices wouldn't go down. Hell, they'd probably go up. Always want MORE MONEY! You just can't have enough! There are probably a few like you, Mike, who wouldn't do this... but you know the corporations would.

Posted by Justin Hamaker (Member # 2165) on 09-04-2009, 02:22 AM:

We opened Julie & Julia this past week and we haven't been able to top about $3.80 percap. I know many theatres would love to have that number, but when you consider we normally run about $4.30, that's a big difference. But not nearly as big as our other theatre that struggled to top $3.00 during the first couple weeks of Julia (they are normally in the $3.75 range).

Posted by Chad Souder (Member # 343) on 09-04-2009, 09:10 AM:

quote: Jack Ondracek
We have a local theatre with something like 8 sales positions at the counter, 2 huge popcorn machines and 4 Coke towers. I've never seen a time when there were more than 2 cashiers back there, mostly watching people bypass them.

You should have visited during the midnight show of Harry Potter. I don't have a clue which theatre you're talking about, but unless it is run by someone incompetent, all stations should have been used.

Posted by James Westbrook (Member # 3690) on 09-04-2009, 07:06 PM:

Julie and Julia attracts a lot of old women who MIGHT buy a small diet coke and a small popcorn, but often don't.
The first day we opened, the first matinee drew a large crowd of the older women, but the late round was dead. A lot of older women don't want to drive at night.

Posted by John Hawkinson (Member # 1135) on 09-06-2009, 08:10 AM:

I understand Mastering the Art of French Cooking has been flying off the shelves at bookstores. You'd probably do better to sell it at your concession stand and up your per-cap to the $8 (one in four people buy the $30 book).

[Big Grin]

--jhawk

Posted by Mike Blakesley (Member # 26) on 09-06-2009, 01:30 PM:

quote: Chad Souder
I don't have a clue which theatre you're talking about, but unless it is run by someone incompetent, all stations should have been used.

My wife and I have been to the Carmike theatres in Billings multiple times. Both of them have two concession counters -- one on each side of the lobby. I've come to believe that the counter on the right is for emergency backup purposes only in case the computers at the left-hand counter go down...because even if the place is swarming, neither of us have EVER seen that other counter in use.

Posted by Michael McGovern (Member # 4807) on 09-06-2009, 03:37 PM:

The deal with the second concession stand was an idea the chains all started about 15 years. The second stand was always intended to be an auxiliary stand, usually located closer to the auditoriums than the main stand, so that customers wouldn't have to walk as far to buy concessions once they were already in their movie, and to perhaps entice those who passed by the main stand to buy something on impulse. The auxiliary stands would usually only be staffed on the weekends when business dictated, but in most cases, after business leveled out 6 months to a year after a new theaters opening, the second stand would rarely if ever get used, since it wouldn't bring in enough extra revenue to make it worth the time, effort, and payroll to run it.

Most new buildings I've seen over the past 5 or so years have completely gotten rid of the auxiliary concession stand, in favor of equally pointless Hawking schemes, but that's another issue.