Concessions at a Video Game (LAN) Center

A view of our Concession selection after we spent almost $1k restocking.

My partner Shawn and I have been pretty busy the past few weeks getting the eBash Terre Haute store caught back up in many areas.  For those close to the store it was apparent the first half of 2010 that we were just getting by when it came to store upkeep and maintenance.  We restocked the food and drinks as funds allowed instead of as needed.  By the time we were at the end of June (right before the ownership change) we literally had JUST the most popular items stocked:  Reece’s, Snickers, Mt. Dew, etc.

So the VERY first thing we did when taking back over the majority ownership on July 1st was make a run to Sam’s Club and restock EVERYTHING.  Shawn had the guys at the store literally go through SmartLaunch and list out anything we have ever carried in the past and dropped just under $1,000.00 on food and drinks.  We paid off a past due amount with one vendor that had kept us from ordering for 2 months and restocked BAWLS, Slushie Mix and Nacho chips.

Before I break down some of the sales more let’s just look at the food/drink sales for our store in the first half of 2010:

January – $4,186.13
February – $4,545.45
March – $4,353.90
April – $4,150.48
May – $3,716.45
June –  $3,677.54

As you can see throughout the year the sales gradually decreased.  Now we are in July and on pace to sell $5,130.87 in food based on the daily average.   However like anything else in the business you cannot just look at the raw sale’s numbers alone.  We need to look at the total number of customer visits during that same time and use that number to calculate the $ spent per customer visit:

January – 4876 Visits = $0.86/visit
February – 4925 Visits = $0.93/visit
March – 5059 Visits = $0.86/visit
April – 4691 Visits = $0.89/visit
May – 4046 Visits = $0.92/visit
June –  4460 Visits = $0.83/visit
July – 5633 Visits = $0.99/visit

Looking at this data our top month was February with $0.93 spent per customer visit.  Our lowest month was June with only $0.83/visit spent on food and drinks at our store.  Unfortunately unless someone out there can help me out I cannot pull the number of customer visits (as Smartlaunch tracks them) for July until the end of the month report.  So we will have to wait a few weeks to see what our $/visit ratio will be for this month.

One thing to keep in mind is that a larger selection doesn’t necessarily sell different items.  I believe that a large selection just puts the thought of food and drink in the customer’s view and then the top selling items are still what is sold.  Nothing ever comes close to the sales of Mt. Dew in our center.  We pick up the 24 ounce bottles at Sam’s Club and sell them for $1.50 each (tax included).  This month for example we have already sold almost 300 Mt. Dew bottles.  That is $450 in sales for Mt. Dew only!  The next closest drink is Dr. Pepper, same size and price, selling 121 units so far in July.

We have never put any of our products into combos, either with other snacks/drinks or with a game time product.  I would be curious to hear from a few centers to see what their experiences have been using food/drinks together to promote the sale of other items.

Monster has great marketing, but there still is a price point issue IMHO.

Energy drinks I feel like should be a bigger part of our center but the price points are sooooo freaking ridiculous.  We make a big effort to keep our margins the same for all of our food/drink products.  That is literally impossible for energy drinks if you want to get the same kind of interest.  We can’t find anyone to supply us energy drinks at less than about $1.30 per can so we price them at $3.00 each or 2 for $5.  We get a bit more interest at the 2 for $5 price point but not enough to push it to the front of customer’s minds.

One thing that I have a problem with when it comes to energy drinks is that the customer usually will spend a set amount of money in our store on drinks.  Let’s use the example of a customer spending $5 on drinks while they are playing at our store?  They can get 2 energy drinks which gives eBash $2.05 in profit after taking out the cost and the taxes.  If they buy 3 soft drinks for $4.50 we will get $2.26 in profit.  The kicker is that the customer also gets 3 drinks instead of 2.

We offer a few frozen items that we sell for more filling options but they really don’t sell a ton.  Frozen pizzas, hot pockets, corn dogs and similar items are nice for the younger kids that cannot leave the store but the older crowd still just runs out to get some food when they are ready for a meal.  We feel like it is something we need to keep for the younger crowd but it is not a money maker.

Candy is an entirely other story.  We sell the crap out of snacks like Slim Jim’s and candy bars.  We have really two categories of snacks:  $1 for candy and candy bars and $0.75 for chips.  The chips really do not sell as much as any of the candy items which is probably good since chips can be kind of messy.

We allow our customers to take their drinks and snacks to the rooms while they are playing.  Many people question this decision but I know that to make the customer’s stay longer and be more comfortable they need to have their drinks and snacks with them while they are playing.  That is one reason we try to stock the drinks with bottles and hence CAPS to keep on the drinks to prevent spills.  Sometimes I question this after I see a room with a Butterfinger smeared into the carpet or a counter all sticky from a drink but I always come back to a room full of happy gamers with drinks and snacks spread out all around them.

I am curious to hear some other center’s feedback on their experience with concessions.  Maybe someone can help us figure out the energy drink side of the business?  I know some have full restaurants attached to their center and I wonder if that helps keep people in the seats longer?

**** UPDATE ****  I have updated the report above to show the July food sales.  This was with a complete restocking of our concessions for the month.  Our visits were WAY up this month but even still we increased our food/concession sales to nearly $1 per customer visit!!!!

2 thoughts on “Concessions at a Video Game (LAN) Center

  1. I always thought people who spent on food outside the center was just money out the door. Food preparation create a lot of heat, additional staffing necessary and we can’t be certain how much interest it generates til it’s done.

    Is the business model centered around selling gameplay or using gameplay to get customers in the door and then selling extras?

    If keeping the customer and their money inside the doors is so important why not try doing something that creates a sense or urgency or desire not to leave? Promote MMOs and competitiveness, or casual tournaments in other games where lost time could be lost “progress” or missing competition matches. A big losers bracket could keep more people involved. This could create an environment where the best viable option to the consumer is to eat food from the center once that option has been created.

  2. Thanks for posting your sales figures. We are no where near that. Our mainstay has been computer repair and upgrades. We have 16 PC’s and no consoles. Thankfully our overhead is low or we would have folded after 3 months. We are in our 7th month and it appears to be getting better. We advertise on the radio and send out flyers. If I didnt enjoy it I would have pulled the plug on our 6 month anniversary. So onward through the fog.

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