Movie Theaters Make 85% Profit at Concession Stands

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You knew movie theaters made a killing selling popcorn, candy, and soda, but wow, 85%! And now that another major movie house chain has announced it is officially banning patrons from bringing in outside snacks, movie goers will face the choice of either paying up or struggling to hear the film over the sound of their rumbling stomachs.

Last week, AMC Entertainment announced its ban, joining the other major theater groups that have an “our junk food or no junk food” policy. For as long as I can remember, I’d thought that outside food and drink had not been allowed in any theater (and yes, I’ve stealthily carried in a snack more than once—because I am an outlaw and/or really cheap), but I guess I was wrong.

SmartMoney reports on just how much the theaters make at the concession stand:

Of each dollar spent there, roughly 85 cents is profit, says Warren Miller, a senior equity analyst for Morningstar who tracks the theater chains. “Any time someone brings in outside food, that hurts their bottom line,” he says. “The more they enforce a no-outside-food policy, the better they’ll be from a financial perspective.” And unlike raising ticket prices, it’s a change that’s unlikely to keep consumers from coming into theaters.

A CNNMoney story that looks into the business of movie theaters plainly reveals that, from the theater owner’s perspective, customers are not at the movies to be entertained. Instead, customers are there to eat (and buy, obviously) soda and junk food, at seriously marked-up prices to justify the money the theater paid to the movie studios and distributors for the right to show the film. Without the hefty concession profits, there would be no movie theater business, even though tickets don’t seem especially cheap and the movie business has done better than most in the recession.

How will AMC’s ban, or any ban for that matter, be enforced? It’s hard to say. Will theaters try to stop, say, a mom from feeding her kid a few animal crackers, some Goldfish, or a couple slices of apple? Things could get ugly if ushers start policing the aisles, pointing flashlights at patrons, and asking where that suspiciously normal-sized box of Raisinets was purchased.

Even if you don’t mind paying six times more than you should for a snack, you should probably keep your hands off the movie theater popcorn anyway. A recent report said that one of those monster tubs of movie popcorn covered with that creepy yellow butter-like syrup contains as much salt as you should consume in a full day. And in terms of calories and fat, chowing down on the popcorn is the equivalent of scarfing down two Big Macs or two of Pizza Hut’s personal pizzas topped with pepperoni.

1 comments
BruceKashinsky
BruceKashinsky

Spending your dollars is equivilent to your votes for or against the theatres sales practice. It is a market after all, if you spend your money you accept their offer, however if enough people do not spend their dollars the theatres will have to compromise or not make any sales.


-Bruce

http://makepureprofits.com