Sunday, March 26, 2006

Movie snack business suffering from declining box-office numbers

The Miami Herald reports:
Moviegoers tend to stuff themselves full of salty popcorn and sweet candy. But when people steer clear of the multiplex -- as audiences have done for three consecutive years -- manufacturers of theater snacks are left with a sour taste in their mouths.

Much has been made that declining movie admissions and box-office grosses have clipped earnings for movie studios and film exhibitors. But audience apathy also is taking a bite out of the concession business, and particularly hard hit are companies that rely on movie theaters for the bulk of sales.

''It's kind of scary. It's been going downhill for three years,'' says Paul Bonfiglio, whose Summit Food Enterprises has laid off a third of its employees because of worsening sales for its movie theater candy line, which includes P.J. Gummi Bears.

Adds Norm Krug, chairman of the Nebraska farmers cooperative Preferred Popcorn, ``Our sales are going down pretty directly with attendance.''
Here's price elasticity in action.Just because the local theatre doesn't want you to bring in food,doesn't mean they can get more revenue by charging much higher prices than the grocery store for candy.