Author Topic: Atlanta Falcons lowered food prices by 50% and got 16% more in sales  (Read 1496 times)

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Offline Moranis

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http://www.espn.com/nfl/story/_/id/22212592/atlanta-falcons-drop-prices-make-more-money-mercedes-benz-stadium-concessions

Goes to show if you price things better people will spend more since they don't feel they are getting ripped off.

Re: Atlanta Falcons lowered food prices by 50% and got 16% more in sales
« Reply #1 on: January 25, 2018, 05:05:58 PM »

Offline Big333223

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Cool.

I know the prices at the TD Garden are ridiculous. Maybe they should give this a try, too.
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Re: Atlanta Falcons lowered food prices by 50% and got 16% more in sales
« Reply #2 on: January 25, 2018, 05:23:30 PM »

Offline Roy H.

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I hope it becomes a trend.

I limit my concessions at the game. If I could grab a slice of pizza and a coke for $5?  Yeah, Id definitely be down for that.


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Re: Atlanta Falcons lowered food prices by 50% and got 16% more in sales
« Reply #3 on: January 25, 2018, 05:38:51 PM »

Online Boris Badenov

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It's entirely possible that they lost money on this, to be clear.

I would imagine that most of these entities have done a full-blown analysis of what their profits would be at different prices, and chosen the ones they have for sensible reasons.

Edit: also, this is not an apples-to-apples comparison, given that you're looking at a team coming off a Super Bowl visit, which would generate increased demand for all kinds of things.
« Last Edit: January 25, 2018, 05:44:39 PM by Boris Badenov »

Re: Atlanta Falcons lowered food prices by 50% and got 16% more in sales
« Reply #4 on: January 25, 2018, 05:52:17 PM »

Offline hpantazo

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It's entirely possible that they lost money on this, to be clear.

I would imagine that most of these entities have done a full-blown analysis of what their profits would be at different prices, and chosen the ones they have for sensible reasons.

Edit: also, this is not an apples-to-apples comparison, given that you're looking at a team coming off a Super Bowl visit, which would generate increased demand for all kinds of things.

you could also argue that fans will eat and drink more at the game if the game is boring....

Re: Atlanta Falcons lowered food prices by 50% and got 16% more in sales
« Reply #5 on: January 25, 2018, 05:54:46 PM »

Offline celticsclay

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It's entirely possible that they lost money on this, to be clear.

I would imagine that most of these entities have done a full-blown analysis of what their profits would be at different prices, and chosen the ones they have for sensible reasons.

Edit: also, this is not an apples-to-apples comparison, given that you're looking at a team coming off a Super Bowl visit, which would generate increased demand for all kinds of things.

How so?

Re: Atlanta Falcons lowered food prices by 50% and got 16% more in sales
« Reply #6 on: January 25, 2018, 05:59:45 PM »

Offline GreenEnvy

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Kudos to the Falcons. I too hope this catches on.

If I could get 3 beers, chicken fingers, fries, and a snack or whatever for around $30, Id do it every game.

With the way prices are here in NYC, youll be luck to get the three beers for $30. So I usually grab a beer or two there and eat before/after events.

Prices should come down. People are willing to spend, but they want value.

Id definitely wind up spending more on beers if they were $4 each than I would $7+. Using me as an example, Id prob get five beers for $20 vs two beers at $8 each. Thats 20% more money and probably does t cost them that much as the markup is still incredibly high (especially on tap beer).

I never really understood why alcohol/food at a game costs more than anywhere else. I get why it costs what it does in bars/restaurants, as that is their primary goods. Sporting events sell tickets. We have to pay to get in, everything else they get from us is a bonus. Then they wanna bend us over when we get there?

You know how many people would eat at the games if it was cheaper than a diner?
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Re: Atlanta Falcons lowered food prices by 50% and got 16% more in sales
« Reply #7 on: January 25, 2018, 06:03:10 PM »

Online Boris Badenov

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It's entirely possible that they lost money on this, to be clear.

I would imagine that most of these entities have done a full-blown analysis of what their profits would be at different prices, and chosen the ones they have for sensible reasons.

Edit: also, this is not an apples-to-apples comparison, given that you're looking at a team coming off a Super Bowl visit, which would generate increased demand for all kinds of things.

How so?

The article just says that sales revenue went up by 16%.

But, food and labor costs must have risen. If you cut the price of hot dogs in half, and your revenue goes up, you're selling more than twice as many hot dogs. So your food costs will at least double. (I imagine that the stadium is already getting the best volume discount possible).

And you need more workers to sell more hot dogs. (Note that the article says there are "65 percent more points of sale and 1,264 more beer taps" - someone needs to work at those.)

The article annoys me, a little bit, because it makes it sound like this is a clear winner, and other teams could learn something from the experience. But in my experience, the pricing departments of sports teams and their affiliates are incredibly savvy and getting more so all the time, and I'd be shocked if this was a surprise to any real experts in the industry.

And indeed the writer does slip in one instructive line: "the reaction by the rest of the sports world has, for the most part, has been to ignore it. Few teams have sought to replicate the model..."

Re: Atlanta Falcons lowered food prices by 50% and got 16% more in sales
« Reply #8 on: January 25, 2018, 06:04:21 PM »

Online saltlover

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Kudos to the Falcons. I too hope this catches on.

If I could get 3 beers, chicken fingers, fries, and a snack or whatever for around $30, Id do it every game.

With the way prices are here in NYC, youll be luck to get the three beers for $30. So I usually grab a beer or two there and eat before/after events.

Prices should come down. People are willing to spend, but they want value.

Id definitely wind up spending more on beers if they were $4 each than I would $7+. Using me as an example, Id prob get five beers for $20 vs two beers at $8 each. Thats 20% more money and probably does t cost them that much as the markup is still incredibly high (especially on tap beer).

I never really understood why alcohol/food at a game costs more than anywhere else. I get why it costs what it does in bars/restaurants, as that is their primary goods. Sporting events sell tickets. We have to pay to get in, everything else they get from us is a bonus. Then they wanna bend us over when we get there?

You know how many people would eat at the games if it was cheaper than a diner?

Without knowing how well you hold your liquor, this is part of the reason a lot of venues have high alcohol prices.  Reducing consumption in the venue is a goal, as it decreases their security/fan management costs.
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Re: Atlanta Falcons lowered food prices by 50% and got 16% more in sales
« Reply #9 on: January 25, 2018, 06:34:43 PM »

Offline celticsclay

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It's entirely possible that they lost money on this, to be clear.

I would imagine that most of these entities have done a full-blown analysis of what their profits would be at different prices, and chosen the ones they have for sensible reasons.

Edit: also, this is not an apples-to-apples comparison, given that you're looking at a team coming off a Super Bowl visit, which would generate increased demand for all kinds of things.

How so?

The article just says that sales revenue went up by 16%.

But, food and labor costs must have risen. If you cut the price of hot dogs in half, and your revenue goes up, you're selling more than twice as many hot dogs. So your food costs will at least double. (I imagine that the stadium is already getting the best volume discount possible).

And you need more workers to sell more hot dogs. (Note that the article says there are "65 percent more points of sale and 1,264 more beer taps" - someone needs to work at those.)

The article annoys me, a little bit, because it makes it sound like this is a clear winner, and other teams could learn something from the experience. But in my experience, the pricing departments of sports teams and their affiliates are incredibly savvy and getting more so all the time, and I'd be shocked if this was a surprise to any real experts in the industry.

And indeed the writer does slip in one instructive line: "the reaction by the rest of the sports world has, for the most part, has been to ignore it. Few teams have sought to replicate the model..."

no i think the staff costs went down because they were many more self service lines...  also it adds in this "Merchandise sales were also up 88 percent." Seems like you are really reading what you want to read on this one. It flat out made more money with this model...

Re: Atlanta Falcons lowered food prices by 50% and got 16% more in sales
« Reply #10 on: January 25, 2018, 06:50:32 PM »

Online saltlover

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It's entirely possible that they lost money on this, to be clear.

I would imagine that most of these entities have done a full-blown analysis of what their profits would be at different prices, and chosen the ones they have for sensible reasons.

Edit: also, this is not an apples-to-apples comparison, given that you're looking at a team coming off a Super Bowl visit, which would generate increased demand for all kinds of things.

How so?

The article just says that sales revenue went up by 16%.

But, food and labor costs must have risen. If you cut the price of hot dogs in half, and your revenue goes up, you're selling more than twice as many hot dogs. So your food costs will at least double. (I imagine that the stadium is already getting the best volume discount possible).

And you need more workers to sell more hot dogs. (Note that the article says there are "65 percent more points of sale and 1,264 more beer taps" - someone needs to work at those.)

The article annoys me, a little bit, because it makes it sound like this is a clear winner, and other teams could learn something from the experience. But in my experience, the pricing departments of sports teams and their affiliates are incredibly savvy and getting more so all the time, and I'd be shocked if this was a surprise to any real experts in the industry.

And indeed the writer does slip in one instructive line: "the reaction by the rest of the sports world has, for the most part, has been to ignore it. Few teams have sought to replicate the model..."

no i think the staff costs went down because they were many more self service lines...  also it adds in this "Merchandise sales were also up 88 percent." Seems like you are really reading what you want to read on this one. It flat out made more money with this model...

Boris is trying to separate revenue (sales dollars) from profits.  And hes right to question.  The article only talks about sales, and mentions little-to-nothing about profits or costs.  It could be that the Falcons profited more, and it could be that their profits went down.  It could also be that they expect this change to have cost profits this year but make up for it in future years (for example, by selling in-stadium advertising for more money because people are spending more time there).

All we know is that sales increased.  Its probable their margin (profit per sale) decreased.  We dont know if total profits increased, and ultimately businesses try to maximize profits, not sales.
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Re: Atlanta Falcons lowered food prices by 50% and got 16% more in sales
« Reply #11 on: January 25, 2018, 07:15:32 PM »

Online Boris Badenov

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It's entirely possible that they lost money on this, to be clear.

I would imagine that most of these entities have done a full-blown analysis of what their profits would be at different prices, and chosen the ones they have for sensible reasons.

Edit: also, this is not an apples-to-apples comparison, given that you're looking at a team coming off a Super Bowl visit, which would generate increased demand for all kinds of things.

How so?

The article just says that sales revenue went up by 16%.

But, food and labor costs must have risen. If you cut the price of hot dogs in half, and your revenue goes up, you're selling more than twice as many hot dogs. So your food costs will at least double. (I imagine that the stadium is already getting the best volume discount possible).

And you need more workers to sell more hot dogs. (Note that the article says there are "65 percent more points of sale and 1,264 more beer taps" - someone needs to work at those.)

The article annoys me, a little bit, because it makes it sound like this is a clear winner, and other teams could learn something from the experience. But in my experience, the pricing departments of sports teams and their affiliates are incredibly savvy and getting more so all the time, and I'd be shocked if this was a surprise to any real experts in the industry.

And indeed the writer does slip in one instructive line: "the reaction by the rest of the sports world has, for the most part, has been to ignore it. Few teams have sought to replicate the model..."

no i think the staff costs went down because they were many more self service lines...  also it adds in this "Merchandise sales were also up 88 percent." Seems like you are really reading what you want to read on this one. It flat out made more money with this model...

The self-service kiosks were for soft drinks, not the other stuff. Right?

As far as merch - you don't think making the Super Bowl in 2017 had just a little bit to do with that? I mean, the franchise value went up from $1.7bn in 2015 to $2.5bn in 2017 - was that because they cut the prices of their nachos?

But anyway like SL says, the article says nothing about profits, which was my main point. It annoys me because it's written so that many casual readers would probably confuse "sales" with "profits." They are two distinct things, and increasing revenue by cutting prices and selling a lot more can easily reduce profits, because costs will go up by a lot if the quantity sold goes up by a lot.

Re: Atlanta Falcons lowered food prices by 50% and got 16% more in sales
« Reply #12 on: January 25, 2018, 07:26:02 PM »

Offline celticsclay

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It's entirely possible that they lost money on this, to be clear.

I would imagine that most of these entities have done a full-blown analysis of what their profits would be at different prices, and chosen the ones they have for sensible reasons.

Edit: also, this is not an apples-to-apples comparison, given that you're looking at a team coming off a Super Bowl visit, which would generate increased demand for all kinds of things.

How so?

The article just says that sales revenue went up by 16%.

But, food and labor costs must have risen. If you cut the price of hot dogs in half, and your revenue goes up, you're selling more than twice as many hot dogs. So your food costs will at least double. (I imagine that the stadium is already getting the best volume discount possible).

And you need more workers to sell more hot dogs. (Note that the article says there are "65 percent more points of sale and 1,264 more beer taps" - someone needs to work at those.)

The article annoys me, a little bit, because it makes it sound like this is a clear winner, and other teams could learn something from the experience. But in my experience, the pricing departments of sports teams and their affiliates are incredibly savvy and getting more so all the time, and I'd be shocked if this was a surprise to any real experts in the industry.

And indeed the writer does slip in one instructive line: "the reaction by the rest of the sports world has, for the most part, has been to ignore it. Few teams have sought to replicate the model..."

no i think the staff costs went down because they were many more self service lines...  also it adds in this "Merchandise sales were also up 88 percent." Seems like you are really reading what you want to read on this one. It flat out made more money with this model...

The self-service kiosks were for soft drinks, not the other stuff. Right?

As far as merch - you don't think making the Super Bowl in 2017 had just a little bit to do with that? I mean, the franchise value went up from $1.7bn in 2015 to $2.5bn in 2017 - was that because they cut the prices of their nachos?

But anyway like SL says, the article says nothing about profits, which was my main point. It annoys me because it's written so that many casual readers would probably confuse "sales" with "profits." They are two distinct things, and increasing revenue by cutting prices and selling a lot more can easily reduce profits, because costs will go up by a lot if the quantity sold goes up by a lot.

Well you are both right, so tps to you both. I agree the way the ESPN article was written was confusing. Here is a much better article on it...

https://www.bloomberg.com/news/articles/2018-01-25/atlanta-falcons-broke-the-rules-of-stadium-food-and-it-paid-off

Re: Atlanta Falcons lowered food prices by 50% and got 16% more in sales
« Reply #13 on: January 25, 2018, 07:31:27 PM »

Offline Roy H.

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It's entirely possible that they lost money on this, to be clear.

I would imagine that most of these entities have done a full-blown analysis of what their profits would be at different prices, and chosen the ones they have for sensible reasons.

Edit: also, this is not an apples-to-apples comparison, given that you're looking at a team coming off a Super Bowl visit, which would generate increased demand for all kinds of things.

How so?

The article just says that sales revenue went up by 16%.

But, food and labor costs must have risen. If you cut the price of hot dogs in half, and your revenue goes up, you're selling more than twice as many hot dogs. So your food costs will at least double. (I imagine that the stadium is already getting the best volume discount possible).

And you need more workers to sell more hot dogs. (Note that the article says there are "65 percent more points of sale and 1,264 more beer taps" - someone needs to work at those.)

The article annoys me, a little bit, because it makes it sound like this is a clear winner, and other teams could learn something from the experience. But in my experience, the pricing departments of sports teams and their affiliates are incredibly savvy and getting more so all the time, and I'd be shocked if this was a surprise to any real experts in the industry.

And indeed the writer does slip in one instructive line: "the reaction by the rest of the sports world has, for the most part, has been to ignore it. Few teams have sought to replicate the model..."

no i think the staff costs went down because they were many more self service lines...  also it adds in this "Merchandise sales were also up 88 percent." Seems like you are really reading what you want to read on this one. It flat out made more money with this model...

Profits were down:

Quote
About 6,000 more fans per game entered the stadium earlier than they did in 2016, and in general, the venue sold as much food by the end of the first quarter of Falcons games as it did in full games in 2016. Fans also gave the Falcons the highest satisfaction rating in the NFL for food and beverages, up from No. 18 in 2016, and the highest rating for security satisfaction, in part the result of lines made shorter by all the early entries.

They also bought more food -- sales were up 53 percent -- and each fan spent, on average, 16 percent more on concessions. It wasnt enough to offset the drop in prices, though. The team made less on concessions in 2017 than it did the year before, according Steve Cannon, chief executive officer of AMB Group, the company through which Blank owns the team.

https://www.bloomberg.com/news/articles/2018-01-25/atlanta-falcons-broke-the-rules-of-stadium-food-and-it-paid-off

The team seems willing to trade short terms profits for the "halo effect" of a better fan experience, and thinks in the long-run it's profits will increase, too.


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Re: Atlanta Falcons lowered food prices by 50% and got 16% more in sales
« Reply #14 on: January 25, 2018, 07:45:27 PM »

Offline Kevins Gamble

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And indeed the writer does slip in one instructive line: "the reaction by the rest of the sports world has, for the most part, has been to ignore it. Few teams have sought to replicate the model..."


Completely agree with this.  Why would other franchises ignore this concept if it increases their profits by 16%?  We can cast the rest of sports ownership as greedy...fine.  But how can they be greedy and reject a plan to increase profits at the same time? 

I would actually argue the experiment was a failure.  If I ran a restaurant business and slashed my prices by 50% and only saw 16% in increased sales...............

If anything, I would see this as an investment in fan loyalty to combat sagging attendance problems...but not something that will drive increased revenue (via concessions directly).  Amazon followed a similar approach for years.
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