Sunday, September 28, 2014

Concessions - Business or Service

As part of our digging deeper into budget, for the first time that I can recall, we've seen detailed revenues and expenditures for the various city concessions.  In the past, we've only gotten generalized numbers, without specifics.  As is so often the case, once the details are available, then we can ask better questions, including getting to the basic question of "If we aren't getting a decent return, why are we doing this?"

It's a fundamental question when you're running a business - you run it in order to make a profit.  When it comes to providing a service, well, then it gets trickier - how much should the city be expected to provide to people who visit the Art Hauser Centre, or the soccer centre?

Of course, we don't get the returns from what is generally considered to be the most profitable product - alcohol sales.  The beer sales from the 7th Hole concession cart at the golf course and the Art Hauser Centre go to the tenants - the Golf and Curling Club and the Raiders, respectively.  Those two groups were thinking like businesses, and the city wasn't, when those deals were made.  It's something to remember when we're renegotiating those arrangements.

And we also found out that during the major athletic competitions that Prince Albert hosted last winter, the concessions weren't always open to take advantage of potential business - hard to make money when you're not open, and it also makes people less reliant on the service, if it's not going to be something they can count on.  In fact, it seems to be common knowledge that it's often faster to go to Timmy's during hockey intermissions than to line up at the concession - and the coffee is better too.

One councillor suggested that we should look at concessions as a service provided by the city, not as a profit generator.  If that's the case, then we should do a couple of things.  First, we should pare down the offerings to the basics, and to products that have a long shelf life, so that we don't lose additional money throwing out perishables that haven't sold.  That would keep our costs down.  Second, if a concession is a service, then let's add a portion of the cost to user fees, since it would be a part of the service provided by the facility.

On the other hand, if it's going to be a revenue generator, let's have it run more like a business - open during prime money-making times, closed when it doesn't pay.  Again, limit the choices, to reduce the costs.  And let's improve the speed of service, so that people don't feel that it's better to go off-site.

I am glad that we've finally seen the numbers, even if the results are disappointing.  And now that our eyes have been opened, and we have the facts, let's decide why we do things, before we decide on how.

"More business is lost through neglect than through any other cause." - Rose Kennedy

1 comment:

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