How Theme Parks and Movie Theaters “Price Gouge” for Food

Have you ever noticed that theme parks and movie theaters charge a lot more for food and drinks than you would pay in any other setting?

I just returned from Disney World and their concession prices reminded me of the sky-high prices of concessions at movie theaters.

Disney World vending machines charge $3.00 or more for a 20 oz bottle of soda. 

I can get the same soda from a vending machine in front of a grocery store for roughly half of that cost.

Why Do Theme Parks And Movie Theaters Charge More?

The answer should be fairly obvious but to get there I think we need to evaluate the answer to another question or two first. Do you pay these prices? Do you see others paying these prices?

If the answer is yes to either of these questions you have your indirect answer. Movie theaters and theme parks wouldn’t charge these outrageous prices if people wouldn’t buy the items at their prices.

What’s even crazier are the prices Disney World charges for parking both on the resort and at the theme parks. While you can technically park at Disney Springs to avoid theme park parking costs, it’s a major pain. What you’re paying for is convenience.

I’d be willing to go a step further and say they likely optimize their prices so that they can make the most profit possible. I’d venture they test different prices in different locations and see how the product sells.

Here’s a simple example of how this works. The seller would test a different price for their product on each day. On day 1, they sell 100 sodas at $1 each. On day 2, they sell 90 sodas at $2 each. On day 3 they sell 75 sodas at $3 each. Finally, on day 4, they sell 50 sodas at $4 each.

In this case, they make $100 at the $1 price point, $180 at the $2 price point, $225 at the $3 price point and $200 at the $4 price point. In the above example, the seller doesn’t sell quite as many sodas but they do end up maximizing their revenue at the $3 price point.

So How Do They Pull It Off?

The reason why you pay these prices is the fact that you are a captive audience in these situations. At the movie theater, you likely aren’t allowed to bring in outside food or drinks. They have the only option for concessions stand items if you don’t want to break the rules.

Most people just accept the high prices because the theaters have done the research to find the perfect price point to make the most money possible. They price right below your maximum allowable wallet pain threshold.

The biggest factor is people don’t plan ahead when they know they’ll be part of a captive audience. As far as theme parks go, many people arrive at the parks and before realizing how high the prices actually are.

By the time people figure out how much things cost in the park, they don’t want to waste their precious time traveling outside the park and just pay the prices on the menu board.

Sadly, most people don’t know you can do bring in outside food and drinks to some theme parks. Other people are lazy and some people are willing to pay the prices. Whatever the reason is, it works in favor of the theme park.

I did see a few people eating food they brought into the park, but I’d venture to say it was less than 10%.

We personally decided to pay the high prices and eat in the park for lunch and dinner. We wanted something hot and fresh so it was worth it to us. They key is, we budgeted for it and could afford it.

We didn’t pay for drinks or snacks though. We brought our own water bottles and refilled them when they were empty. We also carried small but filling snacks with us each day. These two tricks saved us at least a few dollars each day.

We knew we would be a captive audience and planned ahead for what we were willing to pay for. Do you buy concessions at the movies and theme parks? What do you do to save money and where do you budget for some extra spending money?

Lance Cothern, CPA

Lance Cothern, CPA holds a CPA license in Indiana. He’s a personal finance, debt and credit expert that writes professionally for top-tier publications including U.S. News & World Report, Forbes, Investopedia, Credit Karma, Business Insider and more.

Additionally, his expertise has been featured on Yahoo, MSN, USA Today, Reader’s Digest, The Huffington Post, Fast Company, Kiplinger, Reuters, CNBC and more.

Lance is the founder of Money Manifesto. He started writing about money and helping people solve their financial problems in 2012. You can read more about him and find links to his other work and media mentions here.