Lower concession prices...Higher profits?

[Panthro]

[MountainHeel66]

1 hour ago, RoaringRiot said:

Exactly. 

But if beers cost the venue $3, did they make more profit or did people just spend more money? 

well in your model they make $2 more in the higher priced drinks situation... BUT you cant look at it in a vacuum, especially in regards to alcohol sales. As I mentioned earlier, Increased alcohol sales will likely result in increased sales elsewhere. You'll see more impulse buys for food and merchandise as well. That in turn would also increase if you had lower prices on those items as well. Moving tons of merch and food would make them MORE money in the long run. What people don't always take into account on the food is HOW MUCH of it gets thrown away or sent home with employees at the end of every game. There are tons of unsold spoils at the end of games and SELLING those by increasing sales through better alcohol prices etc. would likely result in an ultimate GAIN in sales and reduction in wasted product.

[Mr. Scot]

14 minutes ago, MountainHeel66 said:

well in your model they make $2 more in the higher priced drinks situation... BUT you cant look at it in a vacuum, especially in regards to alcohol sales. As I mentioned earlier, Increased alcohol sales will likely result in increased sales elsewhere. You'll see more impulse buys for food and merchandise as well. That in turn would also increase if you had lower prices on those items as well. Moving tons of merch and food would make them MORE money in the long run. What people don't always take into account on the food is HOW MUCH of it gets thrown away or sent home with employees at the end of every game. There are tons of unsold spoils at the end of games and SELLING those by increasing sales through better alcohol prices etc. would likely result in an ultimate GAIN in sales and reduction in wasted product.

My understanding from the article though was that this practice was done for non-alcoholic drinks (see the quote in the OP).

[uncfan888]

Their margins are already so sky high that you'd think they'd be able to lower their prices a little. 

For instance, I run a vending company and buy bottled drinks directly from pepsi. The same Aquafina that they sell for four bucks in the stadium, I buy for 37 cents each. And since they're sponsored by Pepsi and buy in bulk, I'm sure they pay even less. 

I wish my customers would let me put water in a machine at 4 bucks a bottle.. Haha

[TheMostInterestingMan]

Free market prevails 

[SmokinwithWilly]

If prices are lowered on food concessions, it's likely more people are going to buy. When people buy food, they  need something to drink and that's where the real money is made. If it were me, I'd drop the price across the board, but with noticeable drops in salty foods like popcorn and nachos. Salt makes people thirsty and then you can likely get 2 or 3 drinks out of someone instead of 1, maybe. When I used to bartend, we'd give small taster apps to people at the bar. Drink sales went up big time. The bar, and me in turn, made a lot more money. The best free app was thai chili wings. Beer and soda are the two biggest profit margin items. 

If my wife and I go to an event, we usually eat before we go because we don't want to pay the huge mark up. The arena out here just added 4 new concessions that have more reasonable food, that's fresh made in front of you. We can eat at the arena for a few bucks more than we would at a restaurant. I'm not opposed to buying now, which gives them a new potential customer. 

Psychology plays a big role in marketing. Supermarkets hire specialists to set up their stores for the best ROI. It's better to make 50% of something instead of 100% of nothing. 

[Panther49er]

I had heard from a guy that works at Budweiser that it’s sickiening how cheap the Panthers get their beer compared to what it is sold for. I can’t remember the exact number, but it’s WAY cheaper than what the normal customer can purchase it for outside the stadium in a grocery store. I want to say it was like .40 cents per aluminum pint and even cheaper per pint of draft beer. No reason that beer prices shouldn’t be lowered, but as long as people will pay whatever price for them, I guess we’ll continue to get robbed

[Udogg]

41 minutes ago, uncfan888 said:

Their margins are already so sky high that you'd think they'd be able to lower their prices a little. 

For instance, I run a vending company and buy bottled drinks directly from pepsi. The same Aquafina that they sell for four bucks in the stadium, I buy for 37 cents each. And since they're sponsored by Pepsi and buy in bulk, I'm sure they pay even less. 

I wish my customers would let me put water in a machine at 4 bucks a bottle.. Haha

Ha same here.  I own an indoor inflatable place and I see the market up on fountain drinks.   Hell I even switched to the smaller cubed ice and that made me even more money. 

I remember when I used to think I was getting over on the Quik Trips when I was getting the 48 oz drink for 1.69.  

The markup is insane on everything they are selling.  

[UpstatePanther]

Yeah I don't mean to be that guy but this should come as a surprise to no one. It's a proven economic principle. Lower prices on an in-demand product and people will buy more, which inherently leads to more revenue. It's bell curve much like lowering taxes. Let people (not discussing rich v poor here, just making a general statement) keep more of their money and they will inevitably spend that money somewhere. 

[heel31ok]

11 hours ago, Snake said:

Yeah I never really understood the movie popcorn theory. The more affordable you make something the more people buy. 

Our local theatre is now one price all u can eat popcorn and drinks...self serve...prices are lower than before

[panthers_fan_in_tx]

Higher fan spending doesn't necessarily mean higher profit.  

[SixMileDrive]

The stupidity in this thread.. 

I have no idea how this impacted ATL's profits, neither does anyone else. But higher revenue doesn't mean more profit. In addition, lines at concessions are already crazy long at almost every stadium, so increasing volume probably requires more staff.

Are stadium drinks/food overpriced? Yeah. But just bc ATL tried a different model doesn't mean that it's working better for the team and the article definitely doesn't provide evidence that it is.

[wardvette]

8 hours ago, Marcogreenbush said:

You got to work some macro economics into it to see the ideal price 

Huh?

[Jangler]

55 minutes ago, wardvette said:

Huh?