(qlmbusinessnews.com Tue, 12th Sept, 2023) London, UK —
The owner of Slug & Lettuce and Yates's bars, Stonegate Group, which is the UK's biggest pub chain, has unveiled plans to introduce “dynamic pricing” during peak hours. Approximately 800 of its 4,000 pubs will see an increase of around 20p per pint during evenings and weekends. This pricing strategy is in response to rising operational costs, including heightened security expenses.
Peak-time pricing is a familiar concept in various sectors, such as travel, where rates fluctuate with demand. Stonegate Group intends to notify customers of these price adjustments through notices displayed in their establishments.
This move has stirred some frustration among patrons on social media platforms. Some have reported that it's already in place at their local pub, with prices rising from £3.40 a pint before 7 pm to £4.20 afterward. Critics argue that this approach might lead to emptier pubs after 7 pm if customers feel disincentivized by higher prices.
Stonegate Group has previously employed temporary price increases, such as charging up to 50p more per pint during England football matches shown in their pubs during the last two World Cups. Prices reverted to normal after the matches.
Peak-time pricing is not exclusive to the pub industry; it is also employed by ride-sharing services like Uber and frequently used in the hotel and airline sectors.
A spokesperson for Stonegate defended the move, saying, “Like all retail businesses, we regularly review pricing to manage costs but also to ensure we offer great value for money to our guests.” They explained that “dynamic pricing” allows them to offer deals during less busy times, such as 2-for-1 cocktails, happy hours, and discounts on food and drink, mirroring practices in various sectors to stimulate business during off-peak hours.
Chef and pub owner Tom Kerridge, speaking on Radio 4's Today programme, speculated that Stonegate might reduce prices at quieter times, maintaining similar pricing on Saturday nights. He acknowledged that the hospitality industry is facing substantial challenges due to factors like Brexit, the pandemic, and escalating energy costs, making it exceedingly challenging for businesses to generate profit. Kerridge emphasised the soaring costs within the brewing process, particularly for beer, which has a ripple effect on the end price consumers pay.
Across the UK, pubs have been grappling with mounting expenses, including energy costs, resulting in a surge of closures, particularly in city centres.
In May, data from consultants CGA and AlixPartners indicated a 12% decline in the number of licensed premises in British cities since March 2020, with central London being the hardest-hit area.
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