Inflation, gas prices looming over the sports business, concessions

CHICAGO — Dan Coyne makes the annual trip from his home in Pennsylvania to watch the Chicago Bears with his season-ticket brother, Dave.

A couple of hours before the game, the brothers were fed. Dave Coyne, 47, usually stays away from concessions at Soldier Field, but “I only had to pay for myself today,” he said. “I had no child or wife with me.”

It’s the calculation at play as fans balance their favorite sporting events — games they desperately missed at the start of the COVID-19 pandemic — with persistently high inflation and gas prices looming over everything these days.

US inflation jumped 8.2% in September from a year earlier, the government said this month. That’s not far from the four-decade high of 9.1% in June. Higher prices for housing, food and medical care contributed the most to growth.

Given the industry’s reliance on disposable income, the inflation figures are a worrying sign for sports business executives.

“What’s historically true for teams is that they tend to try to charge less money for tickets, because once someone comes in, they usually make up for it by being inside,” said Ron Lee, SVP of Navigate , data department. sports and entertainment consulting firm. “But with prices going up significantly across the board after the turnstile, I think they need to make some decisions.”

According to the Team Marketing Report, the average cost of attending a Major League Baseball game in 2022 for a family of four was $256.41, up $3.04 from the previous season. The main driver of growth was the cost of tickets: the average regular price of a ticket increased by 3.6% to 35.93 dollars.

Despite the jump in prices, Americans have largely maintained their spending, especially on entertainment and other services, such as travel, that they missed out on during the pandemic. Still, there are signs the robust spending won’t last, with credit card debt rising and savings shrinking as consumers, especially lower-income ones, are hit by a sharp spike in inflation.

Sitting on the bench across from Soldier Field, about to watch his beloved Bears play in person, money wasn’t much of a problem for Cory Metzger.

Or any concern, really.

“This trip has been a long time coming and I’m spending everything I can spend to make it happen,” said Metzger, 45, who works in law enforcement in Fargo, North Dakota.

Casey Lynn, 43, a low-voltage technician from Minneapolis, and his wife, Lori, 44, a commercial lender, aren’t big football fans, but they decided to check out the Bears on a trip to Chicago. While Casey Lynn said he was concerned about paying extra for the tickets, the couple didn’t want to miss out on seeing the game.

“Gas is a necessity. Electricity is a necessity. Sport is not a necessity,” he said. “But if in Rome, why not?”

Of course, the price of the games often includes a trip to the kiosks for a hot dog or beer. Concessions typically have higher margins for sports teams and vendors, but increased costs for merchandise, transportation and labor have squeezed those margins.

The changes came after the pandemic had already seriously affected concessionaires.

“The whole model has been broken in a big way because we’re dealing with 10, 15, 20, 25, 30% inflation when we’re usually guaranteed 2 or 3%,” said Jamie Obletz, Delaware’s president. Northern sports service. “And you can imagine the impact that’s had on us and what it’s made us think and do over the last six to 12 months, like a lot of other companies.”

Paul Pettas, vice president of Sodexo Live!, estimated that overall spending has increased by 10-15% over the past 12-24 months.

“The reality is that costs are going up across the board, but we’re certainly trying to do everything we can to keep that down and not affect the average fan or guest that comes to our events,” he said.

Concessionaires also experience lingering challenges with their supply chains, which have improved recently but remain a factor. Obletz recalled that his company ran out of peanuts in the middle of the 2021 World Series in Atlanta, so two workers took the truck to another site, loaded it up and drove through the night to return to Truist Park.

“Things are not very good,” Obletz said. “They’re better than they were, I think, three to six months ago, and we’re hoping things will continue to improve.”

These challenges have forced concessionaires to get creative to handle rising costs with minimal impact on consumers in terms of culinary options and prices.

The chefs are redesigning the menu to replace items that are significantly increasing in cost and to combine other options. They use analytics to learn about portion sizes – do consumers need six chicken fingers or would five be fine instead? — and looking closely at their sellers.

“There are dozens of things like this that we’ve tried to do and are doing as we speak, very desperately trying to offset the price increases that we’re seeing,” Obletz said.

Alison Birdwell, president and CEO of Aramark Sports + Entertainment, said the company is relying on analytics and its data science team “more than ever” when it comes to menu strategies and new concession stands.

“With guidance like this, we’re working to give fans what they’re looking for while efficiently using our product and reducing significant cost increases,” Birdwell said in a statement to the AP.