Stonegate, the largest pub company in the UK, known for popular chains such as the Slug and Lettuce and Craft Union, has implemented a significant price increase on pints during its busiest evening and weekend trading hours.
In roughly 800 venues, the so-called “dynamic pricing” adjustment will amount to an extra 20p (25 cents) per pint at peak times, and the hike hasn’t been well-received.
Tom Stainer, the Chief Executive of the Campaign for Real Ale, a consumer group representing pubgoers, said he finds the move “troubling” and fears that it could obscure the transparency of pricing for patrons if the message is not prominently displayed.
“We know pubs and brewers are having a difficult time at the moment, but we don’t think an extra charge penalizing customers that want to support the industry is the right solution,” Stainer commented. “Our fear is that it could convince people to stay away.”
The strategy is meant to cover rising costs incurred due to the nation’s cost-of-living crisis, as well as the need for more staff, stricter licensing requirements, and heightened security measures.
Stonegate had previously experimented with surge pricing during major sporting events like the 2018 and 2022 football World Cup tournaments, but it had never been introduced as a permanent fixture in their business model.
When patrons now visit these pubs, they are expected to be greeted with a notice on their table stating “dynamic pricing is currently live in this venue during this peak trading session.”
Of course, the concept of dynamic pricing is not new. It has been widely adopted in various industries, including airlines, hotel chains, ride-hailing platforms like Uber, and ticketing companies like Ticketmaster.
Where the latter is concerned, however, dynamic pricing has often faced criticism. According to a YouGov poll published in December, 71 percent of Britons oppose dynamic ticket pricing.
In response to the controversy, Stonegate has stated, “Like all retail businesses, we regularly review pricing to manage costs but also to ensure we offer great value for money to our guests.
“This flexibility may mean that on occasions pricing may marginally increase in selective pubs and bars due to the increased cost demands on the business with additional staffing or licensing requirements such as additional door team members.”
Stonegate also argues that dynamic pricing allows them to provide enticing deals to customers during less busy trading hours, including 2-for-1 cocktails and discounts on food and beverages.
As the pub industry confronts what will likely be many difficult months ahead, Stonegate’s adoption of dynamic pricing is sure to set the tone for many more pubs to come.
In April, an industry report revealed at least 51 pubs close down each month in the UK, with over 150 shut down in England and Wales in the first three months of 2023 alone.
While the balance between fiscal sustainability and customer satisfaction is never easy to strike, a slight (and most importantly, dynamic) price hike might be exactly what it takes to keep British pubs afloat.
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