Slashing consession prices could actually raise revenue for Kentucky

It has been 10 years since the Atlanta Falcons shocked the sports venue landscape by slashing concession prices by as much as 50 percent. A Coca-Cola and a hot dog for a couple of bucks at an NFL stadium? Proposterous. Fellow professional teams scoffed at the notion, leaning into the simplistic line of thinking that the Atlanta were leaving money on the table for the sake of their “Fans First” program. But it was Falcons owner Arthur Blank who got the last laugh, because lowering concession prices actually increased revenue by 16 percent in the first year. Now, Kentucky is attempting to replicate this success.

Inspired by the Masters prices at Augusta National Golf Course, Mercedes-Benz Stadium in Atlanta chose to stop gouging fans at the concession stand in 2016, and the results have been phenomenal for all parties. The Falcons consistently rank first in the NFL’s annual internal survey for food quality, price-to-value ratio, and speed of service, in addition to the surge in overall profit.

Wait. How exactly could lowering prices actually increase revenue? That is completely counterintuitive. That answer is volume, my friend. Volume.

How many times have you seen the menu at a football game and thought, “$7 for a water?! I’m not going to buy that out of principle.” Or consider a parent who thinks, “I’ll just buy one water, and the kids can share.” Now, with Kroger Field’s $4 bottles of water, that sticker shock gets inverted to, “Oh, that’s not bad. Each kid can have their own bottle of water.” Instead of being annoyed about paying $7, that customer is happy to pay $8.

But the benefits don’t stop there.

Alluring food prices get people into the stadium earlier

Tailgating is a football tradition like no other. It will never go away (unless UK Healthcare continues to infringe upon the Kroger Field parking lots). No one in their right mind is going to pass up an expertly barbequed slab of meat by a Kentucky fan with a beer belly on a grill propped up outside his truck in the Orange Lot for the chance to snag a $3 hotdog.

However, not everyone does tailgating the same way. And for those early games late in the winter when the wind whips around Kroger Field, making an already blustery, cold morning that much more uncomfortable, eating a chicken basket served at a discounted rate in a warm concourse doesn’t sound all that bad. On days like that, maybe you tell Uncle David to pass on bringing grocery store sushi to the tent, and you all head into the stadium early for something a little more high-quality instead.

The Falcons reported that, on average, 6,000 more fans walked through the gates two hours before the game, which not only meant more time to sell food and drinks but also helped to ease wait times and produced shorter lines.

Kentucky is taking a page out of the Falcons’ playbook by lowering traditional stadium food prices, but it is also offering a larger variety of culinary options by inviting local restaurants into Kroger Field. Atlanta’s Mercedes-Benz Stadium ranks No. 1 in the NFL in food quality and variety, and Kentucky is striving to mimic this rating in the SEC.

Maybe $3 nachos won’t make you forego the tailgating experience, but trying out the new signature dish from your favorite restaurant inside the stadium might. You may even want to snag a souvenir cup while you’re at it.

Lower prices make people happy, which makes people spend more

Lowering prices makes people happy, and happy people tend to spend a little more freely. But forget the cost of an item for a minute; human nature tells us that individuals are the ones who want to feel valued during a transaction. Regardless of the price of an item, if someone feels as if they are being ripped off or otherwise treated poorly during a sale, that disdain lingers. It certainly doesn’t invoke the desire to become a recurring customer.

For the first time in a long time, Kentucky Athletics is making a dramatic change that benefits the average fan. So many times over the years, Kentucky has geared its gameday experience improvements to benefit rich donors, while the only thing the guy in section 226 has seen is the cost of his season tickets skyrocket.

Slashing concession prices sends the signal to the family that drives to Lexington every Saturday from Pikeville that the university is looking out for them, too. They matter. That kind of messaging makes the drive up the Mountain Parkway not all that bad, especially if the team is below .500 and about to play a FCS team at noon.

In turn, for Kentucky, increased attendance equals increased ticket sales.

Merchandise sales could also spike

The Atlanta Falcons reported a surprising side effect to lowering concession prices: merchandise sales shot up 88 percent. Fans who feel like they have a few extra dollars in their pockets from saving on food and drinks are inclined to splurge on that $65 hoodie.

Moreover, fans have more time to shop the merch store when they are in the stadium earlier, feel valued, and are overall happier. Other professional sports teams, like the Utah Jazz and Phoenix Suns, have replicated the Falcons’ Fan First pricing with similar success. Now the University of Kentucky will follow their lead.

Overall, this move is a win-win for everyone. In a time when schools must get creative to generate revenue, this is one of the best possible innovations to not only generate more cash for the school but also more satisfaction from the fans.

Of course, Will Stein putting a winning football team on the field will help, too.