Why cinema popcorn costs so much: the economics of the multiplex

Stand at the concession counter of any British multiplex and the arithmetic looks like an insult. A large popcorn costs six pounds or more; the kernels inside it, plus the oil, salt and the tub itself, cost the cinema a matter of pence. Mark-ups of well over 1,000 per cent are routine. But the popcorn price only makes sense once you understand what happens to the money you paid for the ticket, because most of it is not the cinema's to keep.

When a distributor licenses a film to an exhibitor, the two sides agree a rental split, and the terms are steepest exactly when demand is highest. For a major studio release, the distributor commonly takes half or more of gross box office in the opening weeks, with the exhibitor's percentage improving on a sliding scale the longer the film stays on screen. The catch is that modern release patterns front-load everything. A blockbuster can earn the bulk of its total UK gross in its first fortnight, precisely the window in which the cinema's cut is thinnest. By the time the split has tilted in the exhibitor's favour, the auditorium is half empty and the film is weeks from its streaming debut.

Out of its slice of the ticket, the cinema must then cover rent on a large town-centre or retail-park building, business rates, energy for projection and climate control, staff wages, and the servicing of expensive digital projection and sound equipment. VAT at 20 per cent comes off the ticket price before anyone shares anything. Once those costs are paid, the screen itself is often close to a break-even proposition. What turns a multiplex into a business is everything sold in the foyer.

Concession revenue belongs to the cinema alone. No distributor takes a share of the popcorn, the bagged sweets, the nachos or the bucket of soft drink, and the gross margins on those items are extraordinary: popcorn expands to many times the volume of its raw corn, syrup-based drinks cost pennies per serving to dispense, and pick-and-mix is priced by weight at rates that would embarrass a jeweller. Industry figures have long shown concessions producing a minority of a cinema's turnover but a majority of its profit. The six-pound tub is not a sideline. It is the business model, and the film is the loss-leader that gets you within reach of the counter.

Why economists half-defend the mark-up

The obvious objection is that a captive audience is being fleeced, and cinemas do enforce the captivity, with most chains reserving the right to turn away outside food. But research into cinema pricing, including a widely cited study by economists at Stanford and the University of California using actual exhibitor data, points to a subtler logic called metering. Cinemagoers differ enormously in how much a night out is worth to them. Raising ticket prices to capture the enthusiasts would drive away students, families and casual attendees who are more sensitive to the headline cost. Loading the profit onto concessions instead means the customers who value the full experience, and buy the popcorn, the drink and the ice cream, pay the most, while the price-sensitive can still get through the door for the cost of a ticket alone. On this reading, expensive popcorn is what keeps cheap Tuesdays cheap.

The pressure now on the model

The model is under strain from both directions. UK admissions, which reached about 176 million in 2019 according to the UK Cinema Association, fell off a cliff during the pandemic and have recovered only partially, while shortened theatrical windows give audiences less reason to leave the sofa. Chains have responded by squeezing more from each visitor rather than chasing volume: premium large-format screens carrying ticket surcharges, recliner seating, in-seat food service, expanded hot-food menus and alcohol licences. Subscription products such as Cineworld's Unlimited card and Odeon's myLIMITLESS push the same logic further, converting the ticket into a flat fee and betting that frequent visitors will more than repay the discount at the concession stand. Every one of these innovations aims at the same underlying truth: the projector shows the studio's product, but the popcorn machine pays the wages, the rent and the electricity. Resent the price if you like, but without it your local multiplex would probably not be there at all.