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08.04 2023

Preserve Your Cinema with an FEC Conversion

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by Jack Muffoletto, Sr. Principal

August, 4th 2023

What’s Happened

The last round of cinema transformations revolved around the experience. Many customers took the position that the in-home technology available allowed them to re-create cinema picture and sound in the convenience of their home with the familiarity off their comfy chair.

Exhibition responded:

  • Branded Premium Large Format auditoriums with giant screens unachievable at home
  • 3D immersive sound
  • Power reclining seats for comfort
  • Multiple choices to view movies:
  • PLF
  • Screen X
  • 4DX, D-Box, MX4D
  • VIP
  • Dine-in
  • Groups

Since Then

The pandemic caused the cinema industry to halt due to disrupted film production and the shutdown of exhibition.
Furthermore, known threats to the industry worsened. The options to stream film at home have become wider and easier. The theatrical ‘window’ discussion intensified to the point of eliminating it completely.

Over the years exhibitors have become accustomed to threats, so some self-examination was warranted. Questions to be answered:

  • How can we diversify revenue sources beyond Hollywood and become less dependent on them?
  • Are there too many screens for the content being released?
  • How can we generate higher revenue from under-utilized space?

What’s Next

The cinema business model as we know it could become obsolete. Cinema is not going away it is just evolving into something new. Entertainment Centers are quickly becoming the next big thing. Consider an FEC where cinema is a key attraction alongside bowling, arcade / redemption, axe throwing, laser tag, etc. Diverse revenue streams are established for year-round, all-day business.

  • Stay longer
  • Adult focus AND family focus
  • Gaming, competition focus
  • Competitive Socializing
  • Even more F&B! Many existing cinema properties already have the F&B infrastructure

Challenges / Opportunities you run into…

Existing cinema facilities come in all shapes and sizes and markets dictate attractions, ROI, construction cost, etc. However, there are some things you can always count on:

Advantages

  • Square footage and volume available
  • Toilet rooms in place
  • Potential for exterior yard space

Structural Considerations

  • Demising Walls
    • i. Many demising walls are non-load bearing metal stud and gypsum board walls with a few structural steel columns. In these cases, very large openings can be made or the entire wall can be removed.
    • ii. If a demising wall is structural, or made of concrete block for example, deliberate, small linteled openings for visibility can be made
  • Stadium Seating
    • i. Built up stadium seating is mostly non-load bearing metal studs, geofoam or steel stringers and can be removed completely
    • ii. Multiple floor elevations below grade can be leveled with geofoam and concrete
  • Projection booth mezzanine can remain or can be repurposed

Design and Construction Decisions

The facility is an Assembly Occupancy, and therefore we are dealing with the movement of large groups of people. The design solution will be based on your specific market, existing conditions and:

  • Customer Circulation
    • Safe exiting
    • Minimal crossover
    • Accessibility for customers with disabilities
  • Staff Circulation
    • Labor consolidation
  • Fat Cats – AR Mays Corporate Photography by Mark Skalny 1-888-658-3686 www.markskalnyphotography.com

  • Phased Construction
    • Stay open
    • Consider sarting with converting a small auditorium
      • You can visualize how closing an auditorium (or 2 or 3) will not be cause for business stoppage
    • Consider expanded F&B which is a high revenue generator
      • Bar
      • Kitchen
      • Seating
      • Adjacency to existing kitchen utilities
    • Consider arcade games and redemption which are a high revenue generator
    • Create gathering space

  • FFE for attractions
  • Equipment for kitchen and bar
    • Utility connections
  • Phased investment
    • New phase after ROI achieved

Movie going habits have changed and cinemas are changing in response. Streaming movies has been a failure and there is a full flow of wide releases this year. The writer’s and actor’s strikes could impact movie going down the road. Now is the time to consider converting your facility to preserve and increase your revenue, and to combat future threats to exhibition.

Jack Muffoletto, Sr. Principal

05.15 2023

The Evolution of C-Stores

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by Mike Cummings, Sr. Principal

May, 16 2023

The Covid pandemic had a significant impact on the industry.  The overall number of stores and revenue declined, and it also changed purchasing patterns.  The pandemic highlighted how gaps in the global supply chain added a sense of urgency to keep pace with high-demand products in non-traditional C-store categories. Many customers relied on the channel for daily essentials, including grocery items, as well as treats to boost spirits.

The C-Store Landscape covered the most prevalent functions/types of C-Stores including travel centers, fueling C-Stores, Grocery C-Stores, and Urban C-Stores. 

There are still many opportunities for new locations within all types of C-Stores. But what is currently happening in the marketplace and what is next? 

The most interesting current trend is the diversity of food choices.  From personal experience driving to jobsites, I would decide where to stop based on demonstrated ability to provide a good cup of coffee.  That is basic and can provide an alternative to the coffee shop. Not only are food choices the most interesting trend, but it can also have a large impact on revenue. Foodservice sales in convenience stores increased 20.5% in 2021 after falling 10% in 2020, according to the 2022 Convenience Store News Industry Report. Some of the increase was driven by changes in consumer behavior during the pandemic, but it is also driven by demographics. Data from Cargill show millennials are the top indexing convenience store customers. “Better-for-you” foodservice offerings are key to capturing the demographic, as are Mexican-inspired flavors, said Jessica McMillan, strategic account lead for convenience stores at Cargill. “When we look across the consumer base, millennials are actually the first generation to prefer Mexican flavors over Italian flavors,” she said. “If you look at Gen Z, Asian flavors are their top choice.”

By incorporating more diverse flavors like Mexican and Asian, along with healthier choices, can C-stores become an alternative to fast-casual restaurants and/or the market section of a grocery store? I believe they can.

Have you noticed that grocery stores have added market sections to their offerings or included branded C-stores on their sites?  That empirical evidence alone demonstrates the opportunity For C-stores. Some restaurants pivoted and sold basic grocery items during the pandemic.  The C-store can provide both groceries and meals on a 24/7 basis.  

I expect this duality of grocery and fresh meals represents the current evolution opportunity in the C-Store market.  Providing diversity of offerings in grocery, meals, snack, and beverage categories can increase revenue per visit as well as deliver new, regular customers. 

Full realization of the concept will require a focus on convenience including loyalty apps, self-checkout, drive-throughs, and express options.

That is what is happening today in the marketplace, but what about tomorrow?  Stay tuned.

This is part 2 of a 3 part series. To see previous parts, see our news tab, on our website!

Mike Cummings, Sr. Principal

03.21 2023

The C-Store Landscape

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by Mike Cummings, Sr. Principal

March, 21 2023

Convenience stores serve a variety of needs and continue to evolve.   Full disclosure – I am a fan of C- stores, both in my daily life and when I am on the road going to jobsites.  There are more than 150,000 C-stores in the US, and it is a half-trillion-dollar annual industry.  They may or may not sell fuel.  C-stores are evolving from the traditional “cokes and smokes” to becoming a destination and not just a place for gas and a cup of coffee.  C-stores come in all kinds of sizes from small walk-up non-fueling locations to the biggest in the world like Buc-ee’s. 

Most convenience stores fulfill a variety of needs so they can be difficult to categorize.  Among the primary needs that C-stores can fulfill:

Travel centers are generally large facilities with convenient auto and diesel fueling, large restrooms and lots of drinks and snacks.  Many have a restaurant incorporated.  Travel centers offer a welcome stop on road trips to stretch your legs and refuel. Other amenities that you might find at a travel center include:

  • dedicated truck and RV parking areas
  • Pet relief area (I had no idea so many truckers travel with a pet)
  • Expanded food choices.

Fueling convenience stores

The primary function of some C-stores is to sell fuel, with an assortment of snacks and beverages.  Many times, these may be the only fueling option in town or within miles. 

Grocery convenience stores

The primary function of some C-stores is to be the local grocery store; these may be the only grocery option within miles. These stores will also have an assortment of snacks and beverages, and other convenience items, and may also sell fuel.  Grocery is now the third most common category purchased at convenience stores, falling just below snacks and candy, according to data from NRS.

Urban convenience stores

These small, non-fuel locations are normally seen on an active, pedestrian street and cater to people living or working nearby.  I was quite surprised to encounter these types of C-stores while traveling internationally. One in Beijing on the ground floor of a high-rise office building features a steam table serving lunch to workers in the office building.

As I said, most convenience stores fulfill a variety of needs and fit within multiple categories.  The good news is that there are still many opportunities for new locations within all types of C-Stores. And for new types of stores.  Will the “lessons learned” during the Covid pandemic lead to evolution of C-stores or even new types of C-Stores? 

Stay tuned.

Mike Cummings, Sr. Principal

02.20 2023

Reflection and Recap

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by Theresa English, Principal

February, 20 2023

For TK Architects, the gift of 2022 was growth.  After two very difficult years, we saw our efforts pay off with work from new clients.  We added a new Principal, Trevor Ruhnke, which is very exciting.  Leading the next generation of owners will be an architect, a Structural Engineer and a MEP Engineer.  We also doubled our staff including  some fantastic interns.  The talent that has joined us is so exciting and fresh.  We are seeing their growth daily. 

Cinema projects have started to reappear on our drawing boards (okay, monitors but that isn’t quite as elegant of an image).  Entertainment is showing growth too.  Renovation to update and augment amenities is widespread and growing.

Our F& B clients are kicking off national growth programs and expanding their franchisee rosters.  We’ve been working with them to develop their prototypes to allow this growth to be efficient and cost effective while offering the best guest experience.  I was able to attend the Food Service Equipment and Design Thought Leadership Summit conference in Chicago for the first time.  It was great to spend a couple days thinking about what the customer experience of the future restaurant will be.

We have further expanded our project types to include convenience stores.  These clients growth was being hampered by not being able to roll out drawings fast enough.  We were able to help them accelerate and increase their growth and surpass their desired location count by end of this year.

We are happy to leave the early 2020’s in the past.  In 2023, we look forward to adding new clients and more staff to help them achieve their goals.  Stay tuned for further developments!

Theresa English, Principal

02.16 2023

Chiefs Superbowl Parade!

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February 16, 2023

The Chiefs have reached the pinnacle of their sport and are once again Superbowl Chamions! The parade was yesterday, Tuesday February 15th, and the entire KC Metro area showed up to celebrate.

The parade was electric, with red flooding the streets of Downtown KC.