Underground sales sink

Sales dropped by more than 50 per cent after rebrand

The Underground’s sales have been steadily declining for the past several years, leaving TAPS at a deficit.
The Underground’s sales have been steadily declining for the past several years, leaving TAPS at a deficit.

According to preliminary figures, the Underground’s sales have sunk since 2013, when it was rebranded from Alfie’s Nightclub.

In 2013-14, the Underground sold $161,771.11 worth of drinks, a decrease of $134,151.51 from 2012-13 and $203,184 from 2011-12.

Last year, the AMS projected the Underground to sell over $380,000.

In a July 2013 AMS press release, former AMS Vice-President of Operations Nicola Plummer said the AMS Board of Directors had considered shutting down the club if poor revenue figures continued.

At the end of her term in 2014, she told the Journal that it would be up to students to decide if they wanted a nightclub, since nothing had changed with student response to the brand.

“If they don’t, we’ll just shut it down,” Plummer said.

Justin Reekie, current vice-president of operations, said he has no plans to do so.

Reekie, ArtSci ’13, came up with the idea for the Underground rebranding as last year’s AMS Hospitality and Services Director.

He said he’s spent this past summer looking at ways to sharpen the nightclub’s brand.

Last year, total operating expenses for TAPS, which operates both the Underground and QP, were $765,314.85. QP sold $1,173,838.14 of food and drinks.

Allocated expenses, which include administrative and space cost recovery charges, cost TAPS $110,400.

It’s unclear how much it costs to operate the Underground separate from QP, as allocated and operating expenses for TAPS include both establishments.

Last year, Plummer told the Journal that deficits incurred by the nightclub are often subsidized by QP, which garners more revenue and is attended more consistently.

Including cost of sales for both services, TAPS ran a $125,554.55 deficit last year, a stark decrease compared to the $6,712.35 deficit projected as part of the service’s budget.

“The Underground doesn’t really lose much … we’d be in a worse financial situation [closing it] than keeping it open and remaining how it is right now,” Reekie said.

Reekie added that closing the Underground would leave the TAPS budget worse off, because it would still have to pay for all the costs of having the space.

“It’s not as easy as just shutting it down … because a lot of people often forget you’re losing [the revenue] as well. They kind of go hand in hand.”

From May 1, 2012 to April 30, 2013, TAPS made $85,038.11 before allocated expenses. After factoring in those expenses, it incurred a $19,961.89 deficit. The Journal reported in 2013 that an unaudited figure projected the deficit at $30,000.

The Underground is looking to bring more students in through a number of promotions, including a presence during Orientation Week DJing events and a partnership with CoGro.

The idea was created at a branding meeting held over the summer, where Reekie and staff worked to figure out their brand identity.

“For this example, it was to be an essential part of student life, that we’re here for you just as much as students are here for us,” he said.

This year, TAPS is budgeted to run a total deficit of $19,188.07. The 2014-15 administrative charge was $22,000 and the space cost recovery charge was $24,100.

Reekie said he hopes that the Underground will perform better in the coming year, but added that he’s being realistic about the 2014-15 budget. The Underground is budgeted to make $218,390.99 in sales, which would be an improvement over the actual sales numbers of 2013-14.

“I want a number that’s realistic. I don’t think it’s something that will change completely overnight, but it’s definitely getting better,” Reekie said.

“This management team is really looking forward to the opportunity to provide the social value to students that I think is being often forgotten.”

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