The Exhibitor (1953)

EP-8 EXTRA PROFITS Carbonated Beverages Their Profit Potential In Theatres By Peter W. H ires, general merchandising manager, The Charles E, Hires Company, Philadelphia In show business, as in every other commercial venture, it is the net that counts. Income doesn’t necessarily come through the boxoffice alone; on the con¬ trary, there are a great many theatres which, in the past few years, have come to lean heavier and heavier on income from refreshment stands. Actually, this is a very logical thing for many operators to have started in the face of the declining boxoffice receipts because of the large profits available from carbonated beverages. In the grocery store, for instance, carbonated beverages are one of the highest profit items in the whole store. Amusement parks, pools, beaches, drug stores, and all places where bulk syrup or the bottled carbonated beverage are sold are also extremely profitable operations. Institution of the Snack Bar, consisting of a Hires Root Beer keg and a frank¬ furter grill in just the past few months has proven its worth once again in being able to show such profits. If such large profits are obtainable (over 70 per cent on the average carbonated beverage in¬ stallation), then why couldn’t carbonated beverages also become profitable in theatres? In the United States today, there are approximately 20,000 theatres, of which more than 77 per cent are now using carbonated drinks. It is said on reliable authority that this 77 per cent are con¬ siderably more than just glad that they decided to put carbonated beverages in to help boost their net profits. No theatre today actually can afford to pass up the °xtra business which a refreshment bar can produce; it is becoming a permanent part of the act, subject to the basic principles known by all good showmen. Carbonated beverages in theatres today account for something over 11 per cent of the theatre’s total income, an awfully nice cushion for showmen to count on. However, there is one fact which must be remembered, and which all good show¬ men recognize. A refreshment bar needs big names, just as the boxoffice does. It needs names like Hires Root Beer to cut down customer resistance. Speed is important to catch the sale at ffie precise moment when people are thirsty, and have the opportunity to buy. Often times, theatre operators don’t real¬ ize that they are retailers selling to the ultimate consumer. No show is ever booked unless the management feels con¬ fident that it can be sold to the community he serves, and the price paid depends upon most of the same factors which any merchant considers when buying mer¬ chandise for his store. Long before any of us ever heard of self-service merchandising, theatre oper¬ ators employed that technique. They had to. In show business, the sale is made at the boxoffice. Every bit of sales resistance had to be overcome before the patrons queue up at the ticket window. For this reason, the successful impressario had to perfect all matters and ways to presell. He learned to advertise even before that word was known. A low budget show is always a risk few operators are willing to take. It usually means low boxoffice appeal be¬ cause it hasn’t been presold adequately. Despite this common knowledge, it is strange that some theatre operators, thor¬ oughly trained in the principles of highgross economy, fail to see that the same profit factors are involved in merchandise sales. Profits from a beverage stand in the lobby respond to the same conditions which influence the boxoffice. A full house provides more prospects for a beverage stand than a sparsely filled auditorium, but this doesn’t automatically provide high-gross merchandise sales. Prospects must be turned into buyers. Fach prospect must know the location of the refreshment stand, but here, again, that doesn’t bring them to the stand — something must be done to make them act. A certain number of patrons will be quite thirsty, and do something about it, others will have a latent thirst, and even larger numbers will only get the urge to buy through some taste-tingling associa¬ tion they have long ago established in their sub-conscious minds. The sure way to remove every bit of sales resistance is to use the same time tested techniques which bring people through the turnstiles. Remember, only a very small percentage will be satisfied with everything “wet”, provided they are thirsty enough, but if a selection of prop¬ erly chilled, popular beverages could be offered, maximum sales could be pre¬ dicted. In some given group, there may be some who will not buy certain flavors of beverages, but, even more important, is the large group who won’t accept an unknown brand. Standard brands have been presold. Take Hires Root Beer, for example. Ibis delicious beverage has not only been pre¬ sold but presampled as well by nearly everyone for nearly four generations. Its distinctive flavor is recognized easily by taste alone. A root beer by any other name doesn’t mean the same thing. Hires Root Beer is a star with the big¬ gest boxoffice appeal. It is poor economy to put a low budget product in a beverage dispenser, just as it is to put an unknown show in lights on a marquee, for a few pennies saved on an unknown product can never get maxi¬ mum profit since gross sales will always be lower. Therefore, for big theatre profits, pick the brands of beverages which are presold, which encounter no sales resist¬ ance. As many theatre operators have discov¬ ered for themselves, beverages are a very large factor in their net income. The proper way to merchandise bever¬ ages, just as with films, is to have them presold and merchandised. Every theatre operator is interested in getting every penny he can through the boxoffice and his refreshment stands. Here's an example of an attractive concession stand which is cashing in on the Hires potential. EXHIBITOR June 3, 1953