Now showing: epic cost of cinema snacks By Bruce Mohl, Globe Staff | March 2, 2007 http://www.boston.com/business/articles/2007/03/02/now_showing_epic_cost_of_cinema_snacks?mode=PF Buying a small popcorn and a soda at a movie theater is becoming a big investment.
At the 13-screen theater owned by Regal Entertainment Group in the Fenway, the price of a small popcorn and a small soft drink will set you back $10, the same as an adult ticket. Granted, the small popcorn is 85 ounces, nearly twice as big as the small at other theaters, and a small soft drink is 32 ounces, the equivalent of roughly half of a 2-liter bottle, but it's still a lot to pay for modest fare. Susan McWhinney-Morse of Boston recently went to the movies at the Fenway Regal, where tickets for herself, her grandson, and friend set them back $25. A small popcorn and two drinks added $16.50 to the bill. "That's $40," she said. "It's appalling. It's absolutely appalling." All food vendors take hefty profits on the products they sell, but analysts say no one does it quite like movie theaters, which push popcorn, soda, and a host of other items that cost little to make or buy, and generate very high profit margins. "There's probably 85 percent profit just on the cost of goods," said Dennis Lombardi , executive vice president of food service strategies at WD Partners in Dublin, Ohio. He said the typical restaurant makes about a 65 to 70 percent profit on food. John Fithian , president of the National Association of Theatre Owners, said concession sales at a typical movie theater account for a fifth of total revenues but as much as 46 percent of profits. "Concessions are very important," Fithian said. "Without concessions, our patrons would be paying significantly more for their movie tickets." No one tracks concession pricing trends, but industry officials say prices keep edging upward. Globe surveys of area theaters over the years indicate that prices for a 46-ounce popcorn have risen at most of those theaters by a third since 2000. Theaters are under pressure to increase profits in a saturated marketplace that has been plagued by bankruptcies and consolidation. Theaters are also feeling the pinch because of film schedules. While they earn the bulk of their money from ticket sales, theaters split that revenue with the studio that produced the movie. Industry officials say as much as 90 percent of the ticket revenue goes to the studio in the opening weeks of a movie's release, with the theater pocketing more cash the longer the film runs. But as films remain in theaters for shorter periods, the theaters can't earn as much from tickets. In a Globe survey of various theaters, Regal's Fenway theater had the highest prices for a small soda and small popcorn but also the largest portions. Regal's 85-ounce small popcorn breaks down to 6.5 cents an ounce, which is actually lower on a per-ounce basis than many of its competitors. Regal, the nation's largest movie theater chain, said its concession prices vary from theater to theater, but refused to discuss how much they have risen in recent years. The two other big chains in the Boston area, National Amusements' Showcase Cinemas and AMC, said their prices are uniform in each market. Showcase said it charges $4.15 for its 46-ounce small popcorn, or 9 cents an ounce. AMC and Landmark's Kendall Square theater both charge $4 for their small popcorns, but Landmark's small is 46 ounces while AMC's is 53 ounces. Entertainment Cinemas, which runs theaters in Cambridge, Springfield, and South Dennis, charges $4.25 for a 46-ounce small. F.E.I. Theaters, which operates the Somerville Theatre and the Capitol Theatre in Arlington, charges $2.50 for a 32-ounce small, while the Brattle Theatre in Cambridge charges $3 for a 36-ounce small. Ian M. Judge , director of operations for F.E.I. Theatres, said concession prices are high because that's where theaters make their money. While he says the focus at F.E.I is movies, he said that's not always the case at other places. "I worked for Loews for five years and I can tell you that I was told many times that we were not a theater but a restaurant that happens to show movies," Judge said. AMC Entertainment Inc., which bought Loews Cineplex Entertainment Inc. last year, could not be reached for comment. Regal, based in Knoxville, Tenn., reported an $86.3 million profit last year. Its financial reports don't break out what concessions contributed to the bottom line, but the documents indicate concessions were the second-biggest source of revenue after ticket sales. The chain generated $697 million in revenue on concessions that cost $105 million . By contrast, ticket revenues were $1.7 billion, nearly twice as much as film rental and advertising costs of $907 million. The company reported that concession revenue increased 5.6 percent in 2006. It attributed the bulk of that rise to a 4.4 percent increase in the average concession purchase per customer, unspecified snack price increases, and the success of "concession-friendly films" like "Pirates of the Caribbean: Dead Man's Chest," "X-Men 3," and "Cars." Bob Goldin , executive vice president of Technomics Inc., a Chicago consulting firm that works with the food service industry, said the high prices for popcorn and soda don't deter most moviegoers. "Concession prices don't keep people home. Bad movies do," Goldin said. "Theaters have found there's not much price sensitivity to their stuff. It's part of the experience." Most moviegoers interviewed grudgingly agreed, yet there may be a quiet backlash. As she waited for her movie to start at the Regal Fenway 13, Lakeisha Belcher of Dorchester said she sometimes bring her own "goodies" from home. "They don't look in a woman's purse," she said. Bruce Mohl can be reached at [EMAIL PROTECTED] ------------------------ Yahoo! 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