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[Hey Tilman] Cheaper concessions prices produces *more* revenue

Discussion in 'Houston Rockets: Game Action & Roster Moves' started by heypartner, Jul 26, 2018.

  1. heypartner

    heypartner Contributing Member

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    Hawks to lower concession prices on some items

    Apparently, the Falcons proved last year that significantly lowering prices on the most popular items -- water, chips, peanuts, hot dogs, pizza slices, nachos, soda (including free-refill stations and bottomless popcorn) -- produced 16% increase in concession revenue, so Hawks are going to match their pricing.

    And in that copy-cat world of the NBA stadium experience, get'er done Tilman.

    Question now is: Does this work with lowering ticket prices, too.

    ===============================================

    The Atlanta Hawks announced Thursday that they are adopting-fan friendly pricing made famous by their local football team, the Atlanta Falcons.

    "I think we'd be fools not to acknowledge the success the Falcons have had at Mercedes-Benz Stadium," said Hawks CEO Steve Koonin, referencing the team's dropping of prices of everyday concession items, which resulted in a 16 percent increase in concession revenue this past season. "I went there for the national championship game and got four bottles of water and was shocked when they said $8."

    The Hawks, who use Levy, the same concessionaire as the Falcons, said they are dropping the price of 11 of their most popular concessions by an average price of 50 percent. The pricing will be available for every other event -- nearly 200 annually in total --at Phillips Arena.

    A bag of chips will be the cheapest at $1. Candy, pretzels and bottled water will be $2, while fries, hot dogs, nachos and bottled soda will be $3. A pizza slice, bottomless popcorn and bottomless soda will be $4 and a small domestic beer will be $5.

    Sources say that the Falcons sold a lot more volume compared to their last season in the Georgia Dome, but they lost money on the deal. But the money lost was negligible and the value pricing helped make money everywhere else.

    "In the aggregate it's better business," Koonin said. "People think so positively about the food."

    At the Masters, Koonin said, patrons fixate on the cheap food even though they are spending $120 on polo shirts and $1,000 a day on badges.

    The pricing move corresponds with the Hawks completing a transformation of Phillips Arena that cost nearly $200 million and will be completed before the start of next season. There will be almost 40 percent more beer taps and more than 71 percent more points of sale, Koonin said.

    Like at Mercedes-Benz Stadium, self-serve refill stations hope to keep the main lines moving. Fans can also play in a Top Golf simulator and get a haircut in a barbershop.​
     
  2. Nimo

    Nimo Member
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    Because fans need more reasons not to be in their lower bowl seats when the game starts
     
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  3. J.R.

    J.R. Contributing Member

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    Falcons & Hawks

    [​IMG]

    In before "They need to draw fans/fill seats somehow." ... as if the Rockets aren't above bribing fans with concessions.
     
  4. Reeko

    Reeko Member

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    Make it happen Tilman!

    fill up the lower bowl, get us good unis, and lower concession prices...I got faith in u Fertitta
     
  5. Nook

    Nook Member

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    We are talking about Atlanta........ and we are talking about the Hawks.

    I am surprised they don't have to pay people to attend.
     
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  6. tinman

    tinman You want to protect the world
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    Tilman > Greedy Les Alexander
     
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  7. heypartner

    heypartner Contributing Member

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    in by 2 posts, J.R. :)

     
  8. donkeypunch

    donkeypunch Contributing Member

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    $5 Landry's Shrimp Po Boys and $5 24oz beers for the win.
     
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  9. REEKO_HTOWN

    REEKO_HTOWN I'm Rich Biiiiaaatch!
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    Nothing says family fun like a bunch of drunken dudes yelling and spilling beer all over children.

    I mean that in all seriousness. I want cheap beer and I want to scare quiet families out of TC.
     
  10. rocketsballin

    rocketsballin Member

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    hey partner, SHAT UP! /tillman
     
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  11. Snow Villiers

    Snow Villiers Member

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    [​IMG]
     
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  12. kjayp

    kjayp Contributing Member

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    The headline is a 16% increase in revenue... prob is, it aint about revenue - its about profitability... they may have increased revenue by 16% but killed their profit margin as evidenced by 'they lost money on the deal..' They then say the money lost was 'negligible'... prob is those are losses and they missed on any potential profits... Well we only lost $10K which is negligible - but normally we made $5M in profits... big diff...

    'but the fans spent the money elsewhere' seems to be the whole rationale with calling this a success...

    obviously there's a benefit to giving the fan a good deal - makes them happy and provides for an overall more customer pleasing experience which results in greater traffic... but if you're a team that sells out on a consistent basis - then there's no benefit to be had, you're not bringing in additional revenue - you already sell out...

    horrible article....

    sorry, I've spent most of my life crunching numbers while managing various retail operations - and from a business standpoint this is total spin...
     
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  13. Ziggy

    Ziggy Tastemaker
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    They don't sell anything I want there. Maybe the Karbach. That's about it.
     
  14. tinman

    tinman You want to protect the world
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    Trophies are in Florida
     
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  15. Angkor Wat

    Angkor Wat Member

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    i hate that they no longer allow bids on flashseat tickets

    les and crew were way cooler about that
     
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  16. Deckard

    Deckard Blade Runner
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    I think the ticket prices are too high, the upper bowl is absurdly far from the court, the concession prices are too high (that doesn't bother me as much as the poorly designed Toy Box and the ticket prices), and I am beyond sick and tired of seeing those empty seats in the lower bowl through half the game, or even an entire game. I also don't give a damn about what Atlanta does with any of their teams, but I'm glad this topic gave me another chance to complain. Thanks, heypartner.

    I'll add that I would see more games in person, coming down from Austin, if the tickets prices went down noticeably, and the upper bowl was designed like it should have been. The venue is trying to be all things to all possible revenue sources, the result being a compromise that doesn't please anyone, in my opinion. Certainly not me.
     
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  17. heypartner

    heypartner Contributing Member

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    If by "profitability" and "profit margin" you mean "net income" [edit], then lowering prices to increase sales can lead to higher net income. If cheaper pricing on small set of key popular items works, all it means is that your pricing model was wrong to begin with.

    In other articles, the CEO confirms he's talking about total concessions sales volume,,,but I can't yet find net revenue numbers, to confirm whether lower profit margins (on a small set of key items) helps or hurts total net revenue at the concessions.

    kjayp calling out the Hawks CEO. :D
     
    #17 heypartner, Jul 26, 2018
    Last edited: Jul 27, 2018
    don grahamleone likes this.
  18. Os Trigonum

    Os Trigonum It. Deserves. Its. Own. Thread.
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  19. vlaurelio

    vlaurelio Contributing Member

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    you miss these parts?

    and the value pricing helped make money everywhere else.

    "In the aggregate it's better business," Koonin said. "People think so positively about the food."

    At the Masters, Koonin said, patrons fixate on the cheap food even though they are spending $120 on polo shirts and $1,000 a day on badges.
     
  20. sammy

    sammy Contributing Member

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    Whatever leads to the most net income while driving the fan experience should be done.

    This would be a win for the owners and fans.
     
    don grahamleone likes this.
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