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Movie business has been hit hard by the pandemic, with theatres shut since Indian went into lockdown on 25 March. (Photo: Ramesh Pathania/Mint)
Movie business has been hit hard by the pandemic, with theatres shut since Indian went into lockdown on 25 March. (Photo: Ramesh Pathania/Mint)

Theatres gear up for July opening, bracing for significant dip in F&B revenue

  • Through 2018-19, PVR reported 31% increase in sale of movie tickets, while revenue from F&B rose 37%, accounting for 28% of total earnings. Sales of F&B for INOX grew by 19% year-on-year in the first quarter of FY20

NEW DELHI: Conversations with the ministry of information and broadcasting last week have given theatre owners across India hope to look at reopening cinemas by July, given that the directive to open malls and restaurants has already been issued. However, apart from the fear of audiences staying away from theatres, exhibitors are also scared about the massive dip in food and beverage sales.

“F&B sales may drop by 10-20% initially with certain guests preferring to not to eat anything from outside being the prime reason," said Rahul Puri, managing director, Mukta Arts and Mukta A2 Cinemas.

Film distributor and exhibitor Akshaye Rathi pointed out that it is the urban, well-to-do families that will be more likely to be paranoid in the first few weeks of reopening and refraining from coming at all, and purchasing food, if they do.

With large multiplex chains such as PVR and INOX Leisure Ltd offering gourmet menus created in partnership with celebrity chefs, ranging from Mexican and Italian to sushi, pao bhaji and chaat, it is no surprise that more than a quarter of companies’ incomes come from F&B.

Through 2018-19, while PVR reported 31% increase in sale of movie tickets, revenue from F&B rose by 37%, accounting for 28% of its total earnings. Sales of F&B for INOX grew by 19% year-on-year in the first quarter of FY20, with the segment comprising more than 26% of its total revenue.

Alok Tandon, chief executive officer at INOX Leisure Ltd, said the company has taken a deliberate decision of operating with a shortened menu in the initial weeks that would only include basic combos of popcorn and colas, along with nachos, chips, hot beverages and some fresh preparations, all of which will be served in single-use disposable packaging.

“Considering that guests spend two to three hours at our premises, we see sales picking up along with the anticipated increase in footfall," Tandon added.

With theatre owners along with other movie industry representatives having interacted with I&B minister Prakash Javadekar last week via video conferencing, exhibitors say the government is cognisant of the huge issues surrounding the business, currently recording zero revenue.

No sooner than they receive the final go-ahead by the government, theatre chains intend to start special cleaning and disinfection process, the turnaround time for which should be 15-20 days.

However, unlike many other businesses, film exhibition can only resume at the same time across the country. A non-Hindi local language film may find showcasing in specific states but for a Hindi or Hollywood release to be viable, theatres across the country have to be open. Trade experts, especially in north India, expect the big breakthrough to happen by the Independence Day weekend in August.

"All the big cities are red zones. So at least in the south, it might be reasonable to look at Onam in September," said Mukesh Mehta of Malayalam production house E4 Entertainment.

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