Family Affair: Do entertainment centers complement or compete?
One of the more interesting facets of theatre complexes is the evolution or merger of bowling centers, arcade centers and movie theatres. These innovative recreational facilities are often referred to as Family Entertainment Centers, or FECs.
Are these family entertainment centers changing the parameters of the way we do business in concessions? Inasmuch as the food and beverages are different, are they not snacks of similar dimensions? The next question might be: Do these merged entertainment packages encourage longer visits and therefore higher consumption of food and beverages? Another issue could be that the price points at cinemas are typically higher than these newer concepts. Still, the overall attempt is to strengthen the brand image of cinemas and what they can offer as an extension of their discretionary time.
Kevin Mitchell, president of Show Biz Cinemas, states that FECs have become the new destination site for movie patrons. “FECs are absolutely changing the parameters by which theater owners manage the concessions, food and beverages.” He reports that “our customers are passing traditional theatres to get to ours.”
Gary Butske, VP of Emagine Entertainment, Inc., agrees that the parameters for cinemas and foodservice are changing with the addition of FECs. “But,” he adds, “the bottom line is we still need to serve customers with fantastic food and beverage options and excellent customer service, no matter the destination that they are visiting in our venues.”
Are the menus much different? It would appear that the combination of these separate recreational options could actually increase the numbers and types of snacks offered under the same roof. While a movie theatre might not offer French fries, a bowling center might. While bowling centers may not serve popcorn, cinemas certainly do. Therefore, one of the more favorable introductions is expanded menus that blend two separate kinds of fare to make a more enjoyable experience. The menu portfolios may appear to be quite different; however, most FECs use a common concession area that services the multiple outlets. The menu and pricing become congruent. Butske states that the menus should not be much different in their locations. “Customers should be able to get the same quality food and drink whether they are viewing a film, bowling, dining for a meal or hosting an event. Consistency and quality are critical!” he emphasizes.
At one time there was a disconnect between theatres and bowling centers in terms of the difference in pricing between the theatre concessions menu and the other facilities. Arcades may have videogames, crane games and action games accompanied by vending machines. Bowling centers manage to offer smaller sizes and lower prices on soft drinks and even have discounts for “buckets” of beer. These varieties of sales tactics compete with the strategies of a theatre. Most FECs now manage to avoid that conflict by offering one central location that services all the venues. This approach eliminates pricing competition within the cinema itself.
It is evident that FECs do create secondary options of foodservice in the bar areas typically inserted in the bowling locations versus the cinema. The question then becomes: Does the expense of one production area—i.e., concession stand/kitchen—increase the overall cost of equipment, or does it double the equipment cost and decrease the ROI? Those interviewed all agree that two production centers are required for optimal service. It is important that considerable planning is mandated prior to construction of these facilities to eliminate unnecessary duplication of FF&E. “Streamlined products and options allow for consistency and allowing for an apples-to-apples comparison on F&B costs,” Butske maintains.
Mitchell also mentions that the cost of goods as percentages has changed upwardly with the introduction of FECs. He also states that the number of items being sold has increased. This means that while cost of goods percentages are higher in FECs, sales have nearly doubled in his locations. Another contributing factor is the sale of adult beverages, which he confides has helped grow his revenues. “There is no question the average length of stay is longer, and we design the cinema such that the exits pour directly into the bar/lounge areas, which encourages patrons to stay and have one more beverage before leaving the property,” Mitchell observes. Butske believes the length of stay is about the same and does agree that on a few occasions guest will “participate in multiple entertainment options” that increase the time of the visit.
While bowlers can be seen sharing pitchers of soda and slices of pizzas, theatre patrons are partaking in tubs of popcorn and five-ounce bags of confections. FECs are not as susceptible to patrons sneaking in foods, which means patrons are buying more rather not buying at all. Mitchell states that his FECs have a “difficult time quantifying a per-capita in the bowling centers and arcades, as multiples of patrons can play on a single lane or wander through the arcade aisles without buying an admission ticket; therefore the revenue per person is hard to designate.”
Family entertainment centers have a reputation of being less expensive on the outset of the activity versus theatre tickets, since bowling lanes are “rented” by the hour and can be utilized by as few as one or as many as five or six. Typically, this type of entertainment exhibits lower cost of goods as compared to film rental and therefore they normally charge less at the snack bar for concession fare. The hope is that by charging less at the concession stand, the operator will see repeat business. The other thought is that by keeping cost down, the visits to the FEC become more frequent. Frequency helps in all areas, whether it be the arcade, the theatre or the bowling center. The repeat visits to the same location mean double or triple the monthly sales from a single cinema experience. The added sales in the bar translate into nearly twice as much as a single visit to the movies.
In summary, does the combination of entertainment options under one roof improve the brand image of the cinema? Butske replies, “Yes, if done correctly. On the flip side, it can diminish a brand if done incorrectly.” Mitchell is adamant! “Yes, without question! We have become a destination point, we have more for less.” It looks as if family entertainment centers are here to stay. I see architects smiling everywhere.
Larry Etter is senior VP at Malco Theatres and director of education for the National Association of Concessionaires.