Industry
F&B pricing key strategy for smaller theatres to bolster footfalls
Summary
Theatre chains like Mukta A2 Cinemas are reducing F&B prices to attract more viewers and counter criticism of high concession costs. Experts believe this approach may encourage smaller cinemas to adopt similar strategies to boost footfalls among budget-conscious audiences.
With theatre chain Mukta A2 Cinemas having announced a ₹99 cap on food and beverages (F&B) across all properties and titles, trade experts say it is a viable move for non-national, small and independent cinema chains to relook F&B pricing and continue to price them nominally even if ticket rates remain variable according to films and often dictated by producers.
This strategy can help them in the long run at a time that national multiplex chains have drawn much flak for exorbitant concessions, and eventually help bolster footfalls especially among a lower paying clientele.
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“We’ve been listening to our patrons who have been quite vocal about F&B becoming expensive. This required an element of thought from us as we felt it ends up excluding people from coming to cinemas, and bringing F&B prices down would result in attracting more viewers to come give movies a chance," Rahul Puri, managing director, Mukta Arts and Mukta A2 Cinemas said.
He added while their company has been the first to implement such a move, they would wait to see if others follow given that high F&B prices are a concern everywhere, not just in smaller towns. “Lower prices would mean that more items are sold and footfalls benefit, so revenue should eventually balance out," Puri pointed out.
Multiplex vs smaller chains
Ashutosh Agarwal, owner of Star World Cinemas in Uttar Pradesh said their theatres offer F&B at rates that are, at least, 40% lower than those of multiplexes. “That is why we are surviving, even though we are directly pitted against national chains in markets like Allahabad. Our prices are not low, but reasonable because we need a repeat crowd to come to our cinemas. Ticket prices are not under our control because producers take a call on those things but we can decide how F&B has to be priced," Agarwal said.
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He added that when family budgets hover around ₹4,000 per month, it would be impossible to squeeze more than one movie outing if F&B rates are not controlled. That said, there are always exceptional cases. During holidays or when mass-market films pull in large crowds, including families, theatre owners like Agarwal do experiment with slightly higher F&B rates.
To be sure, in the past, multiplex chains have often seen revenue from sale of F&B grow faster than earnings from ticket sales, in an indication of the failure of movies to capture audience attention. Further, theatre owners are increasing F&B sales through gourmet food created by star chefs, tie-ups with aggregators for home delivery, outdoor catering, kiosks in malls, etc.
Per head spending
Trade experts say SPH (spend per head) makes up for admissions when F&B rates go up, or as premium offerings are introduced. With the launch of luxury cinema formats, theatres are encouraging higher spends even if footfalls are low. Combos and offers also help. In such a scenario, smaller theatres can stand out with reasonably priced F&B.
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“Lower priced F&B (in smaller cinemas) should definitely become the norm, because then it would even put pressure on the national chains. The play here is one of volume and attracting a lower audience segment that cannot afford high F&B," independent exhibitor Vishek Chauhan said.
