Riders + Revenue = Rubbish: Managing Concessions and Making Money
Riders are coming to our stations, anyway. Can we make some money off them? Capturing the value of a transit investment can take many forms. Is providing concessions and services a good way to generate a meaningful income? Or just another way to provide amenities for transit riders? Vending machines or specialty retail? Hear from our panel about what it takes to develop a successful program -- from impediments, to thresholds needed to support certain uses, to who picks up the fast food garbage on the train. Advice, lessons and time for discussion.
Moderator: Theresa O'Donnell, AICP, Acting Assistant City Manager, City of Dallas, Texas
Jason Ward, Manager, Joint Development, Metropolitan Atlanta Rapid Transportation Authority, Atlanta, Georgia
Zahoor Kareem, President, Blinq, a Transmart Company, San Francisco, California
Lorna Moritz, President, TR Advisors LLC, Boston, Massachusetts
RV 2014: Riders, Revenue and Rubbish- Managing Concessions and Making Money
1. VENDING
FOOD & BEVERAGE
and SPECIALTY RETAIL
Presented by Denise D. Whitfield - Retail Development & Concessions Planning
Metropolitan Atlanta Rapid Transit Authority (MARTA)
dwhitfield@ itsmarta.com (404)848.5326
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MARTA RETAIL CONCESSIONS
2. Ninth largest transit system
in the country that provides
bus, rail and paratransit
services
Approximately 500,000
passenger boardings each
weekday
Operates in 38 stations
covering 48 miles of rail
Funded by a one cent sales
tax collected in the City of
Atlanta, Fulton and Dekalb
counties
Receives no financial
assistance from the State of
Georgia
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Five Points Station
3. 3
Retail Concessions Program Objectives
• Generate new non-fare box revenue
• Minimize financial risk
• Implement retail program in phases (I and II)
• Ensure long-term growth (10-20 years)
• Provide amenities for our customers
• Partner with local, regional and national brands
• Retain experienced partners
4. Business / Revenue
Model Considerations
• Contributions to
infrastructure improvements
• Understanding potential
vendors’ barriers to entry
• Contract Term – How long
• Implementation - When
• Operations and Management
• Desired long term results
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5. 5
• Phase I - Challenges We Faced
– No sales history, no guarantees, no proven concepts
– Lack of retail concessions experience
– Stations designed for their purpose (but not for retail)
– Manage unrealistic expectations
• Phase I - Outcomes We Experienced
– Guaranteed revenues of $1.3MM
– Customers support retail concessions
– Expanded opportunities for small and local vendors
– Retained experienced partners
6. Phase I
Best Selling Snacks
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Phase I
Dasani
Coke
Sprite
Pepsi
Mountain Dew
Average price $2.00
Average size 20 ounces
Sales YTD - $1.8MM
Best Selling Beverages
Crunchies
Pastry
Chips
Candy
Breakfast Treat
Average price $1.50
28% of beverage sales
Sales YTD - $500K
7. Potential Retail Concepts
• Beverages and Snacks
• Grab N Go Salads
• Fresh Fruit and Vegetables
• Coffee, Cupcakes, Donuts
• Frozen Desserts
• Sandwiches, Popcorn, Pizza
• MARTA Store
• Automated Teller Machines
• Lottery Ticket Sales
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8. A Recap of Our Journey - Where We Started
• 2009 - GA state law changed
• 2010 – Phase I – Vending implemented
• 2011 – Psychographic study conducted
• 2012 – Industry Day held to engage the public
• 2013 – Initiated Phase II solicitation process
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Where We Are Today
• 2014 – Retained Greystone Management
Solutions as our partners
• 2014 – Station Traffic Review to ensure
appropriate retail site locations
• 2014 – Concessionaires’ Input
• 2014 – Issue solicitation/Identify operators
• 2015 – Implement Phase II
10. $ 2,300,000 in Sales
$1,000,000 Revenue
The Best is Yet to Come
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