Feature Article - November 2005
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Handy Solutions to Common Problems

By Stacy St. Clair, Jenny E. Beeh and Kelli Anderson

How To Run a Profitable Concession Stand

Wait a minute before you fire up that grill. Do you really think those same-old hamburgers are enough? Are you still running your food service with the mere hope of breaking even? Do you think that the snack bar adds little value to your facility?

Then you, my friend, have a problem. That's the old-fashioned—not to mention financially naive—way to run a concession stand. It's time to think outside the bun.

Good concession stands keep patrons happy and encourage them to stay longer. They also, if run correctly, can make money.


To transform your snack bar into a profitable concession stand, you first must assess how well it's doing. In a typical neighborhood location, the food cost should be no more than 27 percent of your sales. In locations such as theaters and stadiums, patrons will expect to pay more, which may translate into a 17 percent food cost percentage.


In a neighborhood location, labor costs should run 22 percent to 25 percent of sales. If it jumps to 30 percent or higher, you may be overstaffed or paying too much per hour. Your menu also may be hampering your ability to get high sales productivity per label dollar. A complicated menu, for example, can slow down service. Experts, however, caution that simply cutting food and labor costs do not equate profit. If you cut quality, you may create an unfavorable image with the public. To create bottom-line profits, you must increase revenue while holding your labor and food costs steady.


Remember to keep the menu simple. Variety may be the spice of life, but it doesn't always equate to profits. The more extensive the menu, the more time, skill and inventory required to execute it. Instead, try offering items in a variety of sizes. It will boost sales while keeping a profit.


In addition to concession stand staples such as candy bars and fried foods, you also may want to consider healthier options. There has been a nationwide increase in the demand for healthier foods, particularly in locations that attract children. This can be done without an inventory overhaul by adding items such as apple chips or fruit smoothies. Like all food items, healthier choices should go through the litmus test listed below before being put on the menu.


Before adding new items to your menu, there are many things to consider:

  • Will the new items hurt the sales of other menu items?
  • Will sales dollars on the new item come across the counter at a substantially lower profit than the average menu mix?
  • Do any items need to be eliminated to make room for the new one? If so, how much profit do you give up to get the new one?
  • What skill level is required to prepare the product?
  • Is it easy to gauge the production of the new item? Can you make just a few in slow periods and rapidly expand production if demand grows?
  • What are the inventory requirements?
  • Is there dependable service/support nearby for the equipment?
  • How well has this item worked out for locations like yours?
  • Can you have a short trial period to prove the item works?

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