Britain’s largest pub group has announced the introduction of controversial ‘surge’ pricing on drinks at its busiest venues, with inflation-tainted patrons not happy.
Stonegate Group keeps 4,500 venues, including chains Yates’s and the Slug & Lettuce. In the six months prior to April this year the company reported a loss of 23 million pounds (AU$45 million).
It is now raising prices on pints during peak times, to help cover soaring costs. The “dynamic pricing” system, also known as surge pricing, is common in some industries, such as transport, where airline and ride-share companies charge more during periods of high demand. In the US it is not uncommon at large sporting and entertainment events.
Stonegate first introduced the variable pricing for the World Cup in 2018, then during select one-off events. The recent announcement heralds it as a permanent fixture at 800 of the group’s sites, and will vary between locations.
A “polite notice” has been posted in relevant Stonegate pubs informing patrons of the change, which it’s said is required to cover additional staff and security, cleaning and “complying with licensing requirements”.
Stonegate spokesperson Maureen Heffernan says the system includes the ability to offer guests “a range of promotions” across different days and times, which includes happy hours, two-for-one cocktails and other discounts.
It’s reported the new pricing can mean that “on occasions” pricing may marginally increase in some pubs, likely to amount to around 20p (38c) for a pint of beer, but also that some prices will in fact go down at quieter times.
Other pub groups have since come out admitting that the practice is not unusual and has been “going on for decades”, even going so far as to congratulate Stonegate for their honesty.
Britons, with pubs no exception, have complained of high inflation over the past couple of years.
In July the average price for a pint of draft lager was 4.31 pounds (AU$8.20), marking a 7.8 per cent increase from the four pounds recorded at the same corresponding time in 2022.
This may be why Stonegate’s transparency has not been received as it may have liked, trigging negative press and plenty of commentary on social media; pundits suggesting the dynamic pricing was “driving away customers” and that charging more at certain hours was simply “a grab for cash.”
Zhe Liu, of Imperial College Business School in London, offers that while the strategy may be intended to increase revenue, it may also serve to alienate customers and that the “long-term effect on customer demand” should be considered by publicans.
