Pradyumna Nag
1 min
Ever wondered why the concession stands (F&B counters) are made so enticingly but the box office looks rather dull in a movie chain?
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Here is the real reason why that is.
Let us look at some unit metrics of PVR in the pre-covid era for example.
1/ Net income per admission
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Ticketing
Revenue - $2.3
Cost - $1.0
Net - +$1.3
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F&B
Revenue - $1.3
Cost - $0.3
Net - +$1.0
2/ Gross margin
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Ticketing 58%
F&B 77%
50% more profitable
3/ Revenue Growth 5Y CAGR
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Ticketing 3%
F&B 9%
200% faster growing
4/ Net yield per sft. per month
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Assuming screens take up ~80% of total area:
Ticketing - ~$0.9
F&B - $2.7
424% more yield
If concession stands were a standalone retail space, it would be one of the most lucrative spaces in the country.
So the next time you are wondering why popcorn or cola is so expensive in the movies, remember, you are right now in the most premium F&B chain in the world.