Why is movie theater popcorn so outrageously expensive. In march of 2012, justin thompson, a 20yearold security technician from livonia, michigan, decided to go to the movies. Movie theaters make as much as 85 % profit on items sold at the concession stand. A movie theater american english, cinema british english, or cinema hall indian english, also known as a picture house, the pictures, or the movies, is a building that contains auditoria for viewing films also called movies for entertainment. Cinemark is one of the largest movie theater chains in the united states. Movie concessions drive amc earnings business insider. On a percentage basis, certainly the gross profit percentage for sales at the concession stand is much higher than the gross profit percentage for tickets. But it turned out that theaters that peddled things like popcorn and candy were the ones that survived the depression. It can influence whether a customers experience is positive or negative. They do need high prices because they are covering the cost from sales and roughly %30 of ticket holders purchase concessions so a few have to cover the many. A five cent bag of popcorn retails for between two and three dollars. Dave loomos, coowner of the northwest suburban movie house, says they shutdown on march 16 but fired up the concession stand a.
Here is all the cinemark concessions with prices for their popcorn and snacks as well. Why are popcorn, candy, and soda so expensive at the movie. Amc goes far beyond classic concessions like popcorn and fountain drinks to give you an absolutely appetizing experience. Theres a wide variety of the most popular candies available at the concessions stand. Were always innovating and exploring new ways to bring the best food and drinks to our theatres. Smartmoney reports on just how much the theaters make at the concession stand. That may sound great, but the profit margin for theaters tends to be around 4 percent and is in. Movie theaters are making up for falling ticket sales by hiking the cost of. For reference, even with the exorbitantly high prices on food items, only about 4% of a theater s gross revenue in a given year is profit, despite typically around an 85% profit margin on. How netflix is changing the future of movie theaters. Movie theaters make 85% profit at concession stands.
Can movie theaters rebound following coronavirus outbreak. Concessions is where a movie theater makes its profit. Its grown so much partly due to its fantastic concessions and snacks which you can find below. Fox theater hosting remote movie night and concessions. While concessions account for only about 20 percent of gross revenues, they represent some 40 percent of theaters profits. Many items are inflated to %200%300 mark up prices. There is comparatively little that a cinema can do if there is a poor run of film. We know, its difficult to resist the divine smell of movie popcorn. Americas biggest ripoffs movie theater popcorn 900%. New movies, theaters near you, movie tickets, showtimes.
They do need high prices because they are covering the cost from sales and roughly %30 of ticket holders purchase concessions so. Of each dollar spent there, roughly 85 cents is profit, says warren miller, a. The more theaters and more screens, the more clout the exhibitor has with the distributors. How many concessions does a movie theater have to sell to stay in. Thats because while ticket revenues must be shared with movie distributors, 100 percent of concessions go straight into an exhibitors coffers. However, theater owners exhibitors keep the profits from concessions. The high prices of concessions, were told, stems from two factors. Home theater mart is proud to offer genuine movie theater concessions. Of each dollar spent there, roughly 85 cents is profit, says warren miller, a senior equity analyst for morningstar.
Concessions as a whole candy, drinks, popcorn, etc account for the single largest source of overall income if ticket sales are divided up into types and genres which might seem unfair, except that different types of films will result in very different deals for how much of the ticket sales the theater can keep, and have the highest profit margin as well, but as a percent of a theaters total revenue intake as opposed to profits concessions are only about 4045% of the income. They make all manner of excuses for what goes on in theaters. These products will include traditional fare that is sold in a movie theater such as popcorn, sodas, candy, hotdogs, pretzels, smoothies, ice cream, and. Theaters can stay in business because the profit margins on drinks. Dave loomos, coowner of the northwest suburban movie house, says they shutdown on march 16 but fired up the concession stand a month later. The real reasons movie concessions cost so much mel magazine.
Thats why we created this page with all the regal concession and food prices we could find. The companys secondary revenue center but the companys primary profit center will come from the sale of food and other concessions to customers that are visiting the movie theater. Although concessions account for only about 20 percent of gross revenues, they represent some 40 percent of theaters profits. Cinemark is one of the largest movie theater chains in the united states and. Why movie theaters are trading popcorn and soda for chimichangas. It turns out that movie theaters dont really make any money on the movies, they make their profit on concession sales. Popcorns starring role concessions are where theaters. We all know that profits in the movie theater business are at the concession stand.
After the smell of fresh popcorn and liquid butter attract moviegoers to the food stand, concession workers need to provide quick and friendly service. Learn about the newest movies and find theater showtimes near you. The concession stand employees should give you your large coke before they ring it up, just. A history of movie theater snacks in america popcorn was just the start. Industry statistics cover all companies in the united states, both public and private, ranging in size from small businesses to market leaders. With a theater like the charles, if you have an eastern european movie. The economics of the operation independent cinema office. Movie theaters have endured world wars, depressions and recessions, and the advent of everything from television to streaming. Concession workers operate a profitable part of the movie theater business by selling patrons a variety of snacks. Bidding requires that the theater agree to pay a fixed amount for the right to show the movie. Along with convenience, comfort, and pricing, food is a significant determining factor. A hit film results in high ticket income and high concession sales.
As you no doubt guessed, the fattest line in that thin, 4 percent profit margin is the concessions. There are multiple methods to achieve this increase. The need for concessions how movie distribution works. When you buy a movie ticket, where does that money go. Virtually all the money made at the box office goes back to the film and distribution companies. Check out showtimes for movies out now in theaters. Nine common ways to try and increase concession profits. Understanding what drives movie theater concession sales. Heres how movie theaters are still making money even though ticket. What to expect when movie theaters reopen column variety.
Without sacks at the movies, there would be no movies. If you are looking for home theater concession stands please follow the link. Using data to define the future of movie theater concessions improving the movie theater experience means understanding what motivates moviegoers. Its been estimated that movie theaters make an 85% profit at the concessions stand on overpriced soda, candy, nachos, hot dogs and, of course, popcorn. You knew movie theaters made a killing selling popcorn, candy, and soda, but wow, 85%. How theaters are changing what we eat at the movies vox. Select from the options below to learn more about the menu selections, locations and special offers.
Like most theaters, the smell of freshly popped popcorn permeates the lobby, tempting your taste buds. Regal is thrilled to provide special promotions for all aarp members. Movie theaters make 85% profit at concession stands time. Due to their high profit margins, low operating costs, and quick customer turnover, concessions stands have become a wellestablished staple of movie theaters, carnivals, and outdoor events all over the world. Movie theater concession stand job description career trend. Profit off current movie theater trends the motley fool. That may sound great, but the profit margin for theaters tends to be around 4 percent and is. A theater owner suspected that less than half of his eustomers purchased food at the concession counter. During the fourth quarter, amc reported concessions revenue rose. Some owners of fancier, higherclass movie theaters banned food, considering it to be beneath their business.
Theaters do not necessarily make most of their money on concessions nor do they keep virtually no part of the ticket sales. Movie theaters make an estimated 85 percent profit off of concession sales, and those sales constitute 46 percent of movie theaters overall profits. From cotton candy makers to popcorn machines and much more, our selection represents the finest snack and treat machines on the market. Movie theaters make 85% profit at concession stands economics of the movie theater where the money goes and why it costs us so much moviedistribution2. Inside, he encountered an atrocity were all familiar with. In addition to revenue, the industry market analysis shows information on employees, companies, and average firm size. We invite you to plan a movie night with your family, the. Lets all go to the lobby, a memorable theater advertisement for the concession stand. We also know that increasing your average concession sale per customeryour per cap, is a critical function for a theater owner or manager, ranking just above food and shelter. Most, but not all, theaters are commercial operations catering to the general public, who attend by purchasing a ticket.
A history of movie theater snacks in america bon appetit. A history of movietheater snacks, from the redlicorice war of the 1920s. Choose from a wide variety of concessions classics, including cotton candy, movie theatre popcorn, nachos and more. How closed theater chains will try to restore customer. Moviegoers might be more wary about buying concessions an important part of most theaters profit model, but these transactions can be streamlined in much the. The percentage of theaters revenue attributable to concession sales.