Instead of having customers donate a dollar and giving them a coupon book "worth" $30, why doesn't KFC just donate those $30 themselves (or even half)?
Instead of having customers donate a dollar and giving them a coupon book "worth" $30, why doesn't KFC just donate those $30 themselves (or even half)?
I'm guessing it drives more profits
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The actual value of those coupons is far lower to them, since they aren't really losing the proportion of profits - and yes, it drives more business to them.
not losing profits? some of those coupons are half off, no way their profit margins are that high. but I'm sure that its outweighed by the extra foot traffic or something
Basically, their goal is to get you in the store. the coupon usually only covers part of a meal that people typically buy, so you go in and you end up buying significantly more than you would have, covering the "loss".
Futher, they can then declare the loss as a charitable contribution or something.
Also, they get to take credit for that one dollar donation and inflate their corporate "We Don't Look Like Assholes" numbers.
Yep. They get credit for your donation & they get a tax write-off for the coupons, and they get to sell more stuff so you'll get the "value" out of the coupons. It's a win win win for them and only a win for you if you were going to otherwise buy the exact same things the coupons covered.
Oh yeah. they're totally assholes.
Same goes for those "would you like to round up for <insert relevant children's thing here>" programs. Fucking ghouls.
only reason I go for that is if I'm paying cash because I'm willing to pay that little bit extra to not have change in my pocket
The profit margins are that high - or its for an item that's likely going to encourage sales of a higher margin item.
The profit margin on Coca Cola for a store like KFC is basically 100%.
Also, do you use all of the coupons? If you do, you can end up spending 2-3x of the coupon value easily if you are careful not to buy anything else.
hm actually profits on drinks aren't as good as I was expecting. if I'm seeing correctly, a 5 gallon box of Pepsi syrup costs $105
if I do my math correcy that comes to $3.5/gallon (1 part syrup, 5 parts water)
we sell that (best price) $8.38/gallon and worst price ~$20/gallon
so yeah actually for the medium drinks that's a crazy profit margin of what like 85%? add to that the fact that there's ice, so you're not actually getting the cup full, I wouldn't be surprised with a margin of like 95%
that's why I give those for free half the time lol
can't really find anything else, not sure how to read these charts
Someone explained a long time ago to me how it’s 95-99% profit due to exactly what numbers you described. It’s pretty messed up…
When I used to work fast food, my manager told me that the most expensive component of a soft drink is the ice. Syrup & (filtered) water are pennies, but ice requires electricity to maintain and it's a little more expensive than you'd think.
that's funny but I wouldn't be surprised
definetly true. I need to look at the next truck order, I'm curious what they're paying for this stuff. see what sorts of margins they've got.
A five gallon BiB of coke syrup is like $100 (maybe less if you purchase at volume like KFC's parent company surely does.
That can make ~120 large size drinks.
That's 83¢ per drink in syrup.
A quick look seems like I could get 1000 Styrofoam cups and lids for $120ish (straws are so cheap as to not even need to be included, 0.006¢ per drink) so about 12¢ per drink.
So about 95¢ in supplies, plus maintenance for the machines, CO2, cleaning labor costs... Around $1-$1.10?
But even that sounds high I bet companies like YUM inc get most of these supplies way cheaper than I was looking on restaurant supply sites by buying in huge bulk amounts.
yeah the box of Pepsi costs $105, couldn't tell you what cups cost
You using the coupon means that they successfully enticed you to return. And most people will buy things on top of whatever the coupon is good for so they still turn a profit
Their margins are very high on some items compared to the ingredients, their costs are more dominated by other factors like wages and the costs for the location.
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