Photo: David Fulmer via Flickr
DALLAS (TheStreet) — Super Bowl Sunday taught retailers a hard lesson last year: Fan revenue isn’t a given. It’s earned.Last year, according to Nielsen ratings, an estimated 153.4 million Americans watched part or all of the New Orleans Saints’ victory over the Indianapolis Colts in Super Bowl XLIV, with the National Retail Federation estimating they spent $8.9 billion on the game.
The downside is that the NRF also estimated $52.63 per person in average Super Bowl spending last year, down from $57.27 in 2009.
The economy may have improved slightly since, but companies are still going to have to convince consumers to spend, which means cost cutting and commercials.
Judging by the $3 million Kantar Media says News Corp.’s(NWS) Fox will be charging for commercials this year — a return to 2009 levels after CBS cut prices last year — and the more than $200 million it expects to rake in, retailers are placing huge bets on increased Super Bowl spending this year.
With 13.8% of game viewers hosting Super Bowl parties and another 25.6% attending them, the cost of snacks, drinks, apparel and even new televisions — which the NRF says 3.6 million Americans bought last year, despite spending almost 10% less on everything else — piles up like players after a fumble. Despite the obvious demand, however, retailers are still offering consumers some huge deals. TheStreet took a look at pregame Super Bowl spending and found savings everywhere from pizza delivery to party house rentals in the host city. Regardless of who wins the big game, it’s the consumer who comes out ahead.:
NFL pizza sponsor Papa John’s(PZZA) loves to throw around its estimate that Americans will eat 30 million slices of pizza on Super Bowl Sunday alone. Considering five times that many people watched the game last year, those 30 million slices scarcely seem like enough to go around. Still, Papa John’s expects to use promotional items like the $12 extra-large four-topping pizza it offered last year to send at least 50% more pizzas out the door on Super Bowl Sunday than it does on any of the other Sundays on the calendar.
That’s about 750,000 pizzas, but still short of its competitors at Domino’s(DPZ), which expects to sell 1.1 million to 1.2 million pizzas on game day at a 40% to 45% improvement over its typical Sunday output, according to spokesman Tim McIntyre.
Yum Brands’(YUM) Pizza Hut, which is stepping up its game against Papa John’s by joining the Super Bowl ad mix, also expects a 50% increase, roughly 1.2 million orders and 1.7 million pizzas cycling through its ovens from kickoff to the presentation of the Vince Lombardi Trophy. Considering their promotions will likely be similar to last year’s $10-a-pizza game special, that’s $17 million in revenue without wings, pasta or any of the other add-ons.
If you want to simulate the Super Bowl matchup with friends or see how your favourite team would have stacked up against its conference counterpart had they made the playoffs, Electronic Arts’(ERTS) Madden NFL ’11 is the way to go. Paying a full $60 for it when there’s one meaningful game left on the slate, however, is just foolish.
J.J. Hendricks, owner of the JJGames online used-game store based in Denver, Colo., and creator of a used-game valuator called VideoGamePriceCharts, notes that sports games in general depreciate in value faster than games in any other genre. According to his charts, Madden NFL ’11 has already plummeted from $59.99 when it was released last August to an average of little more than $32 for a used copy for Microsoft’s(MSFT) Xbox 360, Sony’s PlayStation 3 or Nintendo’s Wii. The low end of that average holds an even deeper discount, with prices for the Wii bottoming out at $20 on eBay’s Half.com and the cheapest versions for other systems selling for less than $27 on Amazon.
“If people want to get the best deal they will wait to buy after the playoffs and Super Bowl are done,” says Hendricks, whose charts have last year’s Madden instalment selling for less than $10 and 2007’s version available for $5. “If someone wants to buy Madden ’11, they could save about $10 or so if they waited another month.”
Super Bowl accommodations
For those lucky enough to stumble into tickets or fervent enough about football to follow the Super Bowl just for the party, hotels booked solid for months shouldn’t hamper your fun.
Jaime Dito, spokeswoman for vacation rental firm and Super Bowl advertiser HomeAway, notes that while travel demand for the Dallas/Fort Worth area has increased 163% in the year leading up to the Super Bowl, the number of available rental properties has grown by 140%. The value of those properties depends on just how much (or how long) a renter wants to be there, though.
The owner of a three-bedroom house in Arlington, just 1.7 miles from the stadium (and a half-mile from the ridiculously delicious Dickey’s BBQ) is offering room for eight, a back patio with grill, a fireplace and full kitchen at $2,889 for the whole week leading up to the game. At $412-plus per night (or little more than $50 per person per night), that’s as close to a bargain as this event offers.
By comparison, a two-bedroom, no-frills condo 600 feet from Cowboys Stadium fetches $3,000 for two nights, $4,000 for three and $4,800 for four — not including a full-price security deposit. Slightly more comfortable accommodations in a three-bedroom, three-and-a-half-bathroom condo with its own garage will set fans back $2,000 a night (with a four-night minimum), while a three-bedroom townhouse with a fireplace and room for six commands $10,000 for four nights with matching security deposit.
If you have the cash to spend, however, FlipKey spokesman Eric Horndahl suggests a five-bedroom, three bathroom, two-story home in Arlington with a two-car garage, fireplace, laundry, Wi-Fi and enough room for 10 for $2,500 a night. For all of those comforts without living in a glorified frat house for Super Bowl weekend, however, there’s also a cozy one-bedroom triplex unit in a former Dallas mansion with a covered porch, fireplace and one-car garage for $200 to $500 a night.
Televisions are a considerable investment, but one the National Retail Federation says 3.6% of all Super Bowl-watching Americans made last year. NPD Group found flat-screen televisions grew from 43% of the market during Super Bowl week in 2006 to 94% in 2008, with popular LCD models growing to 79% from 23% in the same span. Since then, according to NPD and market research company DisplaySearch, average TV prices fell 22% in 2009 and another 6% last year. Yet TV shipments remained, well, flat for much of last year as unemployment led to only 0.4% growth in the first three quarters of this year compared with 2009.
This means that even after a slew of holiday sales, which NPD says increased TV sales 5% but decreased revenue by 2%, retailers such as Super Bowl commercial buyer Best Buy(BBY), Wal-Mart(WMT) and Amazon(AMZN) will be touting TV deals just in time for kickoff. Wal-Mart is already holding a “Game Time” sale featuring $600 Sharp 42-inch HDTVs, $750 Element 55-inch models ($800 with a home theatre bundle) and a $480 Sharp HDTV with a home theatre system.
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