M&Ms stores: profitable?

January 17, 2012 7:37 AM

How do M&Ms stores make a profit?

London, New York, Las Vegas: huge multi-floor shops in prime locations, seemingly not selling very much. Do they make money?

posted by devnull to Shopping (10 answers total)

Doubt it, nor do I expect they are meant to. Their costs are most likely part of the product's advertising budget.
posted by kindall at 7:39 AM on January 17, 2012 [8 favorites]

Best answer: This article claims, "Its opening is a further example of what has become known as "retailtainment" where leading brands use their flagship stores as tourist attractions as well as shops."
"Susan Saideman, president of Mars Retail Group, said that the store should help Mars increase sales of M&M's in the UK... The store is expected to have between 4m and 5m visitors a year. "
posted by FreezBoy at 8:11 AM on January 17, 2012 [3 favorites]

Best answer: I don't know about "not selling very much." If the London store in the article linked above is correct, and 4-5 million people visit annually, an operating profit of only 0.25p per visitor would mean £1-1.25 million in annual profits. They'd recoup their investment in ten years. Less, if there were any tax advantages. This isn't a terrible timeframe for a company of Mars, Inc.'s size.

And that's just from the store itself. If it also serves to raise brand awareness, the benefits are incalculable.
posted by valkyryn at 8:30 AM on January 17, 2012

From bitter experience when my wife bought a large bag of green, red and brown M&Ms to decorate a Christmas cake from the London store, they must make enough margin from one sale to compensate for 500 window shoppers.

They rival Eurodisney for that OMFG-is-this-retail-or-organised-crime? feeling.
posted by bifter at 8:42 AM on January 17, 2012 [2 favorites]

Yeah, they charge ridiculous prices for the bulk, sorted, candy.
posted by utsutsu at 8:46 AM on January 17, 2012 [1 favorite]

So. The McDonald's in Time Square doesn't make a dime. It's a "hey, look at me!" thing to demonstrate the power of the brand and it's vitality. It may be the same for m&m mars, it's just a show of power and it's worth the overhead to play with the big boys
posted by GilloD at 8:49 AM on January 17, 2012

Seconding bifter. The prices at the Las Vegas location are insane. Also, they do sell a lot of the specialty packs, especially to non-US tourists, and US tourists seem to buy a lot of toys and stuffed pillows.
posted by Ardiril at 8:55 AM on January 17, 2012

The one time that I was in the Time Square M&M store (fantastic and much needed air conditioning) there was always a huge line at all of the cash registers. I even admit that I bought a super adorable M&M onesie for a friend's new child.
posted by mmascolino at 10:12 AM on January 17, 2012

Yep. It's advertising. I'm sure they probably end up making money, but probably only in fits and starts during whatever the Vegas busy times are.
posted by gjc at 4:16 PM on January 17, 2012

We hosted a lot of foreign visitors in NYC and I remember many of them with M&M shopping bags. I think the novelty plus the prime location sells a lot.
posted by amicamentis at 8:55 AM on January 18, 2012