A Concessions Pricing Strategy

In 2017, I had the opportunity to help a team of students evaluate a Major League Soccer team’s Concession Pricing Strategy.

It’s work I oversaw through running the Sports Analytics Group at Berkeley. I was involved in obtaining the project and helping to guide the group. This was my, and the group’s first consulting project and we certainly learned a lot.

Effectively, the students evaluated what types of items were the best sellers and tried to identify opportunities for growth.

Their main conclusions were related to beer sales. They identified that the market for beer was roughly 8,000 beers sold per game working off of San Jose Earthquakes data. However, the team was not meeting that figure. Their reccomendation was that if the prices are decreased for beer and increased for food items and non-alcoholic beverages across the board, then the team could potentially increase revenues.

They came up with this finding after the craft beer and draft beer analyses presented in this report, which was presented and explained to senior team management here.

They noted that the five most important price points were $14.00, $13.25, $12.50, $11.25, and $10.00. Nearly all the canned and draft beers were sold at these price points. However, based on a 15% decrease that was believed to be beneficial, those prices would become $11.75, $11.25, $10.75, $9.75, and $8.75, respectively after employing psychological pricing tactics.

SAGB’s argument was effectively, that with lower beer prices, which would need to be marketed, a team can improve fan experience and lead to higher food sales.

EDIT (6/3/19): Personally, I am not sure that I agree with these results. Having now worked at other teams since then, I believe that there flaws with this analysis and would love to see an estimation of how much money it would expect to generate in additional food sales. I think there was more the team could have done with this, but as this was our first consulting project, I have definitely grown since then.

Athough, it is notable that some teams have implemented similar strategies as what we suggested over the past few years.

A PowerPoint showing the presented analysis is available here.

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