PVR INOX, the newly merged multiplex giant, is enhancing its combined Rs 1,500-crore F&B business as part of its target to achieve Rs 225 crore in cost and revenue synergies over the next 12-18 months.
F&B typically contributes 30 per cent to a multiplex’s revenues. It is the biggest driver of profits as revenue from ticket sales must be shared with producers and distributors, which is not the case with F&B sales. A moviegoer at PVR spent an average Rs 120 on F&B. The metric, known as spend per head (SPH), stood at Rs 100 for INOX. PVR INOX Executive Director Sanjeev Bijli estimates the combined entity’s SPH to be closer to Rs 120 and says the aim is to boost F&B’s contribution to overall revenue to 35 per cent.
“It goes down to facility planning, kitchen planning and menu planning. Most of INOX’s circuit has been vegetarian but we have identified 50 sites where conversion to a non-vegetarian menu will automatically yield good results and add to our F&B sales,” adds Bijli, citing locations such as Punjab, Delhi, Kerala and Karnataka’s Bengaluru. Leveraging technology to upsell F&B products on their own apps and tying up with delivery people are also important parts of the plan.
The two erstwhile rivals officially merged on February 6, 2023, and began integrating the companies from March. PVR INOX is now the country’s largest cinema multiplex chain with almost 1,680 of India’s estimated 9,000 screens.
Gautam Dutta, who was PVR CEO, and Alok Tandon, who was INOX Leisure CEO, have been made co-CEOs of the merged entity. Operationally, the former will look after North and South, and the latter West, East, and Central. The entity plans to open 150 new screens in FY24 with a capex of Rs 500 crore.
Bijli says ramping up distribution of Hindi, regional and English language films through their PVR Pictures is another focus area. Finer details of achieving other cost and revenue efficiencies for the Rs 225-crore synergy target are being worked out, he says.