“Unhappy hour”: Pubs in the United Kingdom introduce surge pricing
This story was produced by our colleagues at the BBC.
Going for a pint of beer at the pub is an integral part of British culture, as shown in this advertisement from Britain’s Beer Alliance, which represents pubs and breweries.
The average cost of a pint in the United Kingdom is $7.30, according to comparison platform Finder.com. That compares to $4.75 in the United States, based on Frommer’s travel website.
When the U.K.’s biggest pub company, the Stonegate Group, announced in September they were going to increase the price 25 cents per pint at busy times, it didn’t go down very well with regular pub-goers like these two in Bristol in southwest England.
“Don’t think I’d pay any more, because it’s just too expensive already,” said Sarah Johnson.
“If you were there, maybe 8, 9 o’clock on a Friday night and you’re paying a premium, I think that wouldn’t go down particularly well,” agreed Mitch Evans.
The Stonegate Group said it’s been forced to increase prices at 800 of its 4,000 pubs to cover the cost of extra bar staff and bouncers. The company wouldn’t talk to us but in a statement said they offer “a range of promotions and discounts on food and drink products at different times on different days throughout the week.”
All pubs are struggling to offset rising energy, food and drink prices said Jane Pendlebury, the CEO of HOSPA — the hospitality industry trade body. They’re also having to offer higher wages to attract staff.
Media in the U.K. hasn’t helped, she said, by calling it the start of the “unhappy hour.”
“If they had said they’re going to reduce the cost of pints in low demand periods, that would have been applauded and welcomed. It’s just that it’s been set as the price is going to increase during busy periods.”
Before introducing dynamic pricing — which means charging prices to reflect demand — pubs need to think carefully about the risks, cautioned Cath Brands from the pricing platform Flintfox.
“As a business owner, you know when people are drinking more, when they are willing to pay more,” she said. “And you also know when your competitors are charging more than you, as well. You almost need to figure out where your elasticity lies.”
Businesses need to know their limits, she added, in “how far can you push it before you go too far versus knowing that a customer is going to walk away if they don’t have a great experience.”
John Pybus is the landlord of the Blue Bell pub in the city of York, which isn’t owned by the Stonegate Group. It wouldn’t work for his business, he said.
“I know if my regular customers were sat in the pub, and I’d been charging £4.20 for a pint, and then at 10:20 p.m. people walked in and now I’m saying it’s £4.50 a pint, those regular customers are not going to be happy,” he said.
One bar in London has taken a different approach: discounting. At Coupette, drinkers can test out experimental cocktails for $8 every Sunday, which is half the regular price.
Barman David Letito believes it’s a good way of attracting new customers.
“A lot of times people, if they like the vibe and everything, they’re gonna stay for two more drinks, you know?” he said.
They often return and pay the full price for cocktails, he said. But Pendlebury from HOSPA thinks a lot of pubs will soon have to follow Stonegate in charging more for drinks.
“Perhaps they’ll just increase their prices across the board and then give discounts during quieter periods,” she said.
That way — even though it’ll still be painful for drinkers — it won’t be quite so obvious.