PVR Inox seeks to widen alcohol sales in select premium markets to combat shrinking audiences
Summary
To counter dwindling footfalls, PVR Inox plans to serve alcohol in lounges of premium properties in select cities. This strategy aims to enhance customer experience and increase revenue, although alcohol consumption inside movie auditoriums is not allowed.
Multiplex chain PVR Inox is seeking licences to serve alcohol at additional premium properties in select markets such as Gurugram and Bengaluru in a bid to combat dwindling footfalls, two people familiar with the plan said.
While the move is unlikely to be extended to patrons inside auditoriums, they would be able to enjoy drinks in the lounge before or after a movie in luxury theatres like Director’s Cut. This is expected to improve the company’s revenue – even if few films find traction in cinemas – as these luxury properties are expected to attract people for the good food and drink and the experience.
PVR Inox declined to comment on the plan.
The company already serves liquor in lounges, seating and live music areas of premium properties such as Director's Cut in New Delhi and Maison Inox in Mumbai. These areas are located adjacent to cinema auditoriums but remain unconnected to them. Under the Cinematograph Act, liquor cannot be carried inside movie auditoriums.
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“The new move would be limited to high-end properties in metros. By keeping prices high, as is anyway the case with F&B in cinemas, the chain would be able to filter out lower socio-economic segments or unruly elements," one person said.
PVR Inox expects to attract new patrons, including those who may not want to choose between having a drink and watching a movie, the second person said.
Beyond movies
With the abundance of content available for home viewing, experts point to a future where cinemas will become luxury, up-market, premium spaces combining the best food, drink, lounge areas, sound and projection. Indeed, the movie itself may not be the most critical part of the experience.
PVR Inox is increasingly investing in luxury cinemas and gourmet food innovations in an attempt to ensure that the difference between watching something at home and in the theatre is stark enough. The luxury theatre format will account for 20% of PVR Inox’s overall screen inventory, the company had said earlier.
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“The endeavour is to expand this as it provides an attractive opportunity to increase SPH (spend per head)," said Abneesh Roy, executive director (research) at Nuvama Institutional Equities. “PVR has been trying to augment revenue streams in the past few years. Alcohol is a state subject, therefore the requirements for getting a liquor licence is different for different states."
Other considerations, Roy said, include the monetary impact of getting and renewing licences, which can be prohibitively high in some states.
The move is meant to help the company’s profit margin when few films are finding favour with audiences. Collections from Hindi cinema, including dubbed versions of South Indian films, dropped to ₹4,679 crore from ₹5,380 crore in 2023, according to the Ormax Box Office Report 2024.
Footfalls – at 883 million in 2024 – were lower than in the previous two years and remain below pre-pandemic levels.
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PVR Inox’s profit rose 3.9% to ₹68.1 crore in the third quarter of FY25 from a year earlier, the company said in an investor presentation dated 6 February. Revenue from food and beverages climbed to ₹520.9 crore, equivalent to about 30% of its total revenue of ₹1,738 crore in the quarter. Sale of film tickets rose 5.8% to ₹879.1 crore.
