Why Do People Struggle So Much With Snack Prices?

[Chef Mickey]

Way to compare completely different markets... Software veer se theme parks erc

Stunning

Lol, nowhere did I say they were similar. Prices are more about what people will pay. AAPL certainly doesn't give its customers a discount because Foxconn assembles their phones in China..

Disney is certainly not out of line against their peers either.

 

[Chef Mickey]

No matter how many people repeat this silliness, it isn't any less idiotic to compare to sporting arenas or theaters.

The difference is, Disney markets itself as a "one stop" destination who does everything they can to keep you on their property from the moment you arrive in Orlando to the moment you leave. That means 3 meals a day, every thing you ingest for a week.

At the venues people try to compare it to, people aren't feeding families substantial meals because they are only there for a few hours.

So yeah, I'm sure it's kind of shocking for a family of 4 or 5 to budget $40+ for a few water breaks every day, especially since most places don't advertise that you can ask for free ice water and I doubt most guests know about it. If they did, Disney would stop doing it...

You can certainly do some research or not go if you're broken by snack prices at Disney. Lol, no one twists your arm to go or stay. At the end of the day, it's a choice.

I still say the perception is wrong. Ask 100 regular people how much profit Disney makes at the parks on $100 in revenue. I bet over 50 of those people say a number higher than $50 per $100. Disney makes money, but all good companies do. They also have enormous costs, overhead, employees, maintenance, etc that bring their operating margin to around 20%.

 

[AEfx]

See, it's crap like this why you can't have a discussion and why I stick to the News forum - a few of you have this really snotty attitude insinuating that any discussion about price must be about people being broke or poor or whatever derogatory way you want to put it.

What's funny is, the folks who talk like that don't have or know what real money is. Hint: if you think you have to impress folks with how well-off you think are by dismissing or putting others down who are discussing the price of a WDW vacation on a WDW message board - and have to make a stink "putting people in their place" over the price of a bottle of water - it says a whole lot more about you than it does anything else.

 

[lazyboy97o]

You can certainly do some research or not go if you're broken by snack prices at Disney. Lol, no one twists your arm to go or stay. At the end of the day, it's a choice.

I still say the perception is wrong. Ask 100 regular people how much profit Disney makes at the parks on $100 in revenue. I bet over 50 of those people say a number higher than $50 per $100. Disney makes money, but all good companies do. They also have enormous costs, overhead, employees, maintenance, etc that bring their operating margin to around 20%.

Disney also has a ton of bloat, plenty of it generated by the model you're so in love with.

 

[flynnibus]

Lol, nowhere did I say they were similar.

You used them as a direct comparison to say Disney's margins aren't ripping you off relative to those other named companies. You damn well did use margins from a completely different industry to make a relative comparison. One that is complete garbage.

 

[Pumbas Nakasak]

Fanboys be right on that corporate message. Vote rodent.

 

[Chef Mickey]

You used them as a direct comparison to say Disney's margins aren't ripping you off relative to those other named companies. You damn well did use margins from a completely different industry to make a relative comparison. One that is complete garbage.

Nowhere did I say the industries were similar. It was never my point to compare similar industries. I was pointing out that regardless, companies take advantage of customers where possible. Apple could charge much less, but they don't because customers will pay. Disney is no different and Disney has to price even more competitively because they are a different industry.

 

[Haybritt]

I have learned to just clear my mind at Disney and not think about food prices. It was hard to do, but makes things less stressful. Plus, just open your eyes and notice what food costs have done everywhere. A burger at Disney might be around $10, but it is too at Applebys, Fridays, Chilis, etc.

 

[flynnibus]

Nowhere did I say the industries were similar. It was never my point to compare similar industries. I was pointing out that regardless, companies take advantage of customers where possible. Apple could charge much less, but they don't because customers will pay. Disney is no different and Disney has to price even more competitively because they are a different industry.

So you try to support the point disney's margins are within reason by citing completely irrelevant information you had no intention of drawing comparisons to. Very convincing argument!

 

[Chef Mickey]

So you try to support the point disney's margins are within reason by citing completely irrelevant information you had no intention of drawing comparisons to. Very convincing argument!

You think it's irrelevant, I don't. Disney's margins are competitive with their own business and lower than other businesses. As consumers, we all have choice and pay what the market will support. Clearly, Disney has it right.

 

[flynnibus]

You think it's irrelevant, I don't. Disney's margins are competitive with their own business and lower than other businesses. As consumers, we all have choice and pay what the market will support. Clearly, Disney has it right.

Competive with their own business? Isn't that like saying I'm as pretty as myself?
And lower than others?.. Cited with what? Other irrelevant industries?

I go back to my earlier question - did you graduate from Wharton?

 

[Chef Mickey]

Competive with their own business? Isn't that like saying I'm as pretty as myself?
And lower than others?.. Cited with what? Other irrelevant industries?

I go back to my earlier question - did you graduate from Wharton?

Competitive with other theme parks is what I meant by own business. Disney is not ripping you off...sorry no comparisons help you.

Yes, I did...

 

[flynnibus]

Competitive with other theme parks is what I meant by own business. Disney is not ripping you off...sorry no comparisons help you.

Yes, I did...

No comparisons help me? Maybe it's because you have failed to cite any that are actually relevant. We're dealing with facts here, not emotions. "Own business" others might call industry.

When you find Disney actually sharing their parks operating margins, and not rolled up segment reporting please let us know.

But since you like working in the 'just trust me' world of citation.... The reason people are upset with these prices is because we see prices go up faster than what we get in return... And we have a long history with the consumer side of this business relationship... All while Disney continues to celebrate higher and higher revenues largely on the back of higher and higher price increases year after year. (As stated in their own fillings)

The last time I recall Disney citing greater customer satisfaction or product demand as reasons behind increased demand in their earnings was Dca v2

 

[thomas998]

Disney Parks' margins are reasonable. They are <20% operating margin most quarters. That's a fact. Apple, Microsoft, Netflix, and Pfizer rip you off far more.

Not sure how you came up with a profit margin less than 20%... I see a 50 cent bottle of water being sold for 4 bucks... I may not have a PhD in mathematics but that's just a wee bit more than 20%.

And yes I assume you are saying that overall the entirety of the parks may be less than 20%, but if that is the case they need to raise the prices or lower the costs on things in the park so that water and snacks isn't used to create that 20% margin... Though frankly I expect that the margins are much higher for everything in the park and if it ever shows as 20% or less it is only because they are loading the numbers with some serious overhead from corporate.

 

[xdan0920]

did you graduate from Wharton?

Sure, why not?

I graduated from Harvard, and Notre Dame, and Oxford.

 

[Yelloweaver]

Thank you! I heard people saying constantly that they "could get a 24 pack of water for $3."

I'm like, does Costco have the Haunted Mansion?

Nope Costo doesn't. We always have cases of water delivered to our resort and carry 4-6 bottles into the park every day. That is usually plenty when at the parks. Don't want to carry? Get a locker.

 

[Chef Mickey]

Not sure how you came up with a profit margin less than 20%... I see a 50 cent bottle of water being sold for 4 bucks... I may not have a PhD in mathematics but that's just a wee bit more than 20%.

And yes I assume you are saying that overall the entirety of the parks may be less than 20%, but if that is the case they need to raise the prices or lower the costs on things in the park so that water and snacks isn't used to create that 20% margin... Though frankly I expect that the margins are much higher for everything in the park and if it ever shows as 20% or less it is only because they are loading the numbers with some serious overhead from corporate.

Disney doesn't report margin for water separately. Overall, it's around 20-22%. They could double ticket prices and make water $1, but no one would like that either.

I do agree with the above that it would be interesting to see operating margin by park location (Orlando, California) and each specific park.

Btw, operating margin isn't even their total profit because they still have to pay interest and taxes.

 

[Chef Mickey]

No comparisons help me? Maybe it's because you have failed to cite any that are actually relevant. We're dealing with facts here, not emotions. "Own business" others might call industry.

When you find Disney actually sharing their parks operating margins, and not rolled up segment reporting please let us know.

But since you like working in the 'just trust me' world of citation.... The reason people are upset with these prices is because we see prices go up faster than what we get in return... And we have a long history with the consumer side of this business relationship... All while Disney continues to celebrate higher and higher revenues largely on the back of higher and higher price increases year after year. (As stated in their own fillings)

The last time I recall Disney citing greater customer satisfaction or product demand as reasons behind increased demand in their earnings was Dca v2

Agree with you that their numbers are significantly rolled up and it would be interesting to see it separated. I would guess WDW could be higher margin if they'd report it by location.

I also agree that customer satisfaction, particularly at WDW could be lower than before. I have been highly critical of WDW and their lack of innovation and lackluster new attractions/offerings.

My whole point in all of this is that Disney's actual profit per dollar from theme park operations is lower in reality than what many people may think. I have also acknowledged that their total profit dollars are higher than ever, but margins have actually been higher in prior years.

 

[flynnibus]

My whole point in all of this is that Disney's actual profit per dollar from theme park operations is lower in reality than what many people may think

The mob is selfish and never thinks like a business owner -- but the discussions here should be at a higher standard than the selfish me-me-me crowd.

Your whole margin comparison argument has been poor based on the points chosen and the fact you were calling theme park margins that were not really theme park numbers due to the aggregate that P&R is.

Your comments also ignored realities like Disney driving higher profits... and their next step was to... continue to raise prices.. and continue to monetize more and more experiences.

Standing here say "prices aren't that bad!!" while the mouse is putting price stickers on everything around you and jacking prices every 6-12months... while reporting the best quarters ever... is obtuse and pretty ignorant of the importance of customer sentiment.

 

[Chef Mickey]

The mob is selfish and never thinks like a business owner -- but the discussions here should be at a higher standard than the selfish me-me-me crowd.

Your whole margin comparison argument has been poor based on the points chosen and the fact you were calling theme park margins that were not really theme park numbers due to the aggregate that P&R is.

Your comments also ignored realities like Disney driving higher profits... and their next step was to... continue to raise prices.. and continue to monetize more and more experiences.

Standing here say "prices aren't that bad!!" while the mouse is putting price stickers on everything around you and jacking prices every 6-12months... while reporting the best quarters ever... is obtuse and pretty ignorant of the importance of customer sentiment.

Are you arguing prices are too high and will cause consumer sentiment to shift to "Disney is too expensive" and result in significantly lower crowds? I'd say Hallelujah to that. Not only would crowds decrease, Disney would be forced to offer better experiences if they choose to operate with current price models. At this point, it really isn't deterring people, would you agree? I see a lot of people complaining, but WDW's guest growth keeps increasing, although dipped slightly last Q.

Given that the P&R margin is around 20%, are you saying breaking it out by theme parks specifically would result in higher margins, indicating resorts bring down the average?

I'm not an investor in Comcast/NBCUniversal, but some lazy research showed 38% margin at parks in 2012. They probably break out their earnings slightly differently, but I'm not sure Disney's main competitor in Orlando runs their business much differently. How much is water there? If I recall, their price increase are pretty much in lock step with Disney. I just look at Universal and see essentially the same thing, don't you?

The purpose of bringing up margins in other industries was to illustrate that people are willing to pay the price for which they find value in the product/service. AAPL could charge less for their products but they don't because people will pay, just like at Disney. Apple is squeezing you far more because to your point, they farm out labor and don't pass the savings on to you because they don't have to. Apple made $53b in profit in 2015 and I don't blame them either.