Update: Cutting prices boosts sales, profits

Movie theaters – hard hit by the pandemic – have discovered that discounts will bring customers back

A business hard-hit by the pandemic, changing demographics, and an indifferent product has discovered that cutting prices will bring customers back.

No, unfortunately, we’re not talking about wine.

The latest industry to recognize its problems is the move theater business, whose financial position is so precarious that one analysis says it has lost 8 percent of its customers forever. Which is even worse than wine’s shrinking market share.

So what did the industry’s trade group do? Cut prices, of course.

Are you listening, wine business?

The results were staggeringly good: A $3 movie ticket promotion in early September attracted 8.1 million customers, a nine percent increase from the previous week. And why did it work so well?

Because the No. 1 reason people are reluctant to return to movie theaters, according to one study, is not the pandemic, but the high cost of tickets – as much as $13 on average in New York City and even $12 in Omaha, Neb. To offer a little perspective, that’s almost twice the cost of a monthly subscription to Hulu and more or less what one month of Netflix costs.

It’s also worth noting that the high prices study found that almost two-thirds of movie-goers don’t go any more because “I’m not interested in films currently in theaters.”

Sound familiar, wine business?

We’ve written a lot on the blog about premiumization’s death grip on wine and how wine’s continuing decline in popularity can be linked to the steady increase of prices since the end of the recession. Which has happened despite the drop in demand and the seeming contradiction of one of the most basic laws of economics.

And, as also noted many times, other industries – faced with the same problem – cut prices to stimulate demand. And it usually works, doesn’t it, Walmart?

But not wine. Which explains why I have to keep writing these reminders and why I’ll keep doing it until it makes a difference. I’m not the Wine Curmudgeon for nothing.