Are Consumers Sensitive to Concession Prices?

We have seen in our data that one of the most frequently visited locations, on the day of seeing a movie, are supermarkets.  That got us thinking:

  • Are these visits for the weekly shop, or are consumers buying snacks to take to the cinema, to avoid high foyer concession costs?
  • Does the type of movie being watched make a difference?
  • Is it different from one exhibitor to the next?

Armed with a bulging databases and enquiring minds we took a look.
To the first question we filtered our data a little more closely.  We had seen in earlier numbers a staggering 39% of people went to a supermarket in the two hours before the movie, but this is really a little too broad. So we looked at consumers that had been to a supermarket within 30 minutes before entering the cinema and whose supermarket visit was less than 10 minutes long.  We figured this would eliminate big weekly shops.

Surprisingly 15.2% of cinema goers in November, December and half of January 2019 fitted the bill.  This is an enormous number and even if only half are buying snacks consumed in the cinema, the exhibitors are missing out on a huge amount of revenue. We can only guess at reasons but a credible hypothesis is that some consumers find concession prices too high.

To test this theory we looked at whether the movie made a difference.  Our assumption was a family movie likely means more attendees and therefore more mouths to feed, as opposed to an action movie where each adult may simply pay their way.  The larger the group the greater the potential savings via the local supermarket.  The answer was far from conclusive with a nearly 11% hike in supermarket attendance for family movies.

We also looked at whether economic pressures made a difference.  We further assumed that consumers may feel more financial pressures closer to Christmas. And indeed we found a slight deviation the closer to the holiday with a nearly 7% jump.

On to exhibitors and a look at the top three. our initial hypothesis were mostly realised although it has to be said the rates between exhibitors are very similar. Our assumptions included:

  • Cineworld has a strong Umlimited customer base, with a 10% concession discount, so it would  be lowest.  With Odeon following closely with the same 10% discount for Limitless customers.
  • Vue customers on average arrive four minutes later (than the published showtime time) to the cinema than the other two so customers are less likely to be buying concessions.
Cineworld has the lowest supermarket attendance of any exhibitor at 13.4%, with Odeon close at 14%.  Vue wasn’t too far behind at 15.5%.

How much discount does it take to get a consumer to buy all their snacks in foyer? It is clear we don't have conclusive data but the spread between Cineworld/ Odeon and Vue suggests a 10% price reduction could lead to a 13% increase in concession sales. But those maths are debatable and who knows what would happened if the discount were 5% or 20%.

With regards other exhibitors: a mixed bag.  Showcase had a whopping 18.9% supermarket attendance in December but stopped down to a very comfortable 12.3% in January. Everyman performed well at 14.2%, and independent cinemas were surprisingly quite high at an average of 16.3%.

But ultimately none stood out as significantly higher than the other.  It is clear that some consumers – be it for choice or price – prefer to buy popcorn  at a supermarket, sometimes for a quarter of the cost.