In March of 2012, Justin Thompson, a 20-year-old security technician from Livonia, Michigan, decided to go to the movies.
Inside, he encountered an atrocity we’re all familiar with: the movie theater concessions stand, with its $8 popcorn, $6 sodas, $5 candy bars.
Left with no alternative, Thompson indignantly bought a treat at an 800% markup. Then, he went home and sued AMC for charging “grossly excessive prices” on its snacks.
“He was taken for a ride,” Thompson’s lawyer, Kerry Korgan, told The Hustle. “I’m sorry, but you can go and get a bag of popcorn at any convenience store for next to nothing.”
The lawsuit was later dismissed, but it raised a question we’ve all asked: Why the hell are movie theater concessions so expensive?
We set out to find an answer — and it took us right to the heart of a declining industry’s business model.
Before we dive into the why, let’s take a quick look at just how much you’re overpaying for snacks at the movie theater.
We dug through concessions data from AMC, Cinemark, and a number of other theater chains to compile rough averages of how much certain items cost. Then, we compared these prices to the typical street price you might pay at a convenience store.
It should be said that movie food and beverage prices vary widely by geographic region, theater size, and a number of other factors. In the course of our research, we saw popcorn prices as low as $0.99 and as high as $13.75. The figures you see here are rough, non-definitive industry averages — but they still paint a bleak picture.
Moviegoers pay the highest premium for popcorn.
At most major movie theaters, you’re looking at around $8 for a medium-sized bag of buttered popcorn — nearly the price of the average movie ticket ($9).
At 11 cups, the average medium-sized movie popcorn goes for $0.73/cup. By contrast, a 175-cup bag of genuine movie theater popcorn can be had on Amazon for $48.23, or about $0.27/cup.
A movie theater ICEE ($6.49) runs 4.4x more than a 7-Eleven Slurpee (which is the same thing), and a soda ($5.99) is 3x the cost of a store-bought Coke. One box of movie M&M’s ($4.79) could buy you nearly 3 boxes at your local Walmart.
For a simple date night (let’s say a popcorn to share, two sodas, and some Red Vines), you’re looking at $24.79 — more than the price of two average tickets ($18). For a family of 4, the cost of snacks might run up to $50 or more.
When we examine the markup (profit minus cost) on these products, the figures are even uglier.
Read the rest here.
Great post
ReplyDeleteThis is an old problem. My father worked in the theater business in the late 1940's. He left in 1951 because his job had become traveling to various cities to close theaters. The company was a chain theater group with exclusive agreements with a Hollywood movie production company. After the anti-trust case against Paramount they were forced to divest many of their theaters. My father informed me that by 1951 the remaining theaters were using concessions to bolster profits. One of the readers of Hustle pointed this out https://en.wikipedia.org/w/index.php?title=United_States_v._Paramount_Pictures,_Inc.&fbclid=IwAR2jCjQj6BQPlGvoQOdBJ8skhiymughgdFAjWGX5WxM79iTed9UIHsmCFS8.
ReplyDeleteThe Federal governments heavy handed use of the anti-trust laws certainly contributed to the decline of movie theaters.