Quote:
Originally Posted by getbak
The HRR on concessions is calculated net of direct costs, including product costs and employee wages. The players' share on a $10 beer isn't $5. It's half of the net revenue from selling that beer.
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Thanks for that. Point remains though, the profits from concessions are cut in half. And only direct costs are included.
The bottom line is that, even though we are paying very inflated prices for our beer, the profitability from it is half what the price suggests.
We should assume that the cost is less than the 'retail' keg numbers that theslymonkey presented. Let's throw $2 per glass out there as a guess. Then add $1 - $2 for employee wages and other direct costs. Putting their cost of a beer somewhere between $3 and $4.
That makes the profit margin for HRR $6 - $7, so the players get $3 - $3.50 and they make the same. My guess is that the direct costs are higher than that and the profitability is probably less, but it's a probably a reasonable number for conversation purposes.
Obviously they are making money on concessions, but some people think the $10 charge is 90% profit, and that simply isn't the case.