The slug & Lettuce’s owner plans to raise prices during busy times.
According to recent reports, the owner of well-known pub chains Yates and Slug & Lettuce has disclosed that it will impose higher prices on its patrons during peak hours.
According to information obtained by the BBC, Stonegate Group will implement “dynamic pricing” at “800 of its 4,000” pubs on the weekends and in the evenings. It also reveals that Stonegate “will charge about 20p more per pint,” though details regarding price changes for other alcoholic drinks are still pending.
According to the BBC, the price hikes are allegedly being implemented to “reflect the higher costs” that Stonegate Group has been facing. They also cover obtaining “extra security.”
A Stonegate Group representative responded to New Food by saying, “Stonegate Group, like all retail businesses, regularly reviews pricing to ensure we offer great value for money to our guests as well as to manage costs.”
“All throughout the managed business, our dynamic pricing includes the capacity to provide customers with a variety of promotions, such as happy hours, two-for-one cocktails, and price breaks on food and drink items at various times on various days of the week.
“Due to the increased cost demands on the business with additional staffing or licensing requirements, such as additional door team members, this flexibility may mean that on occasion pricing may marginally increase in select pubs and bars,” the spokesperson said.
Costs “may marginally increase” in “selective pubs and bars,” according to the spokesperson, but the move seems to have sparked controversy on social media. But will the justification for price increases resonate with other bar chains, encouraging them to adopt comparable tactics?
Based on “Happy Hour” to conflicting feelings
Currently, the bar chain Slug & Lettuce, which has 80 locations throughout the UK, is offering discounts on its mocktails and alcoholic drinks, including 2-for-1 cocktails depending on the time of day.
The cost of each pub’s cocktail menu varies; for example, the popular Pornstar Martini is currently available at Slug & Lettuce’s St Paul’s, London location for £13.50, while the same drink is sold at its Blackpool location for £12.00. But it’s unclear if there will be more price variations after Stonegate’s “dynamic pricing” is put into effect.
The Slug & Lettuce pubs owned by Stonegate Group presently feature a “Happy Hour,” which is a designated period of time during the day when specific beverage prices are lowered.
However, consumers may be cautious when they choose to get together and socially drink with friends and family in order to keep costs down amid the cost-of-living crisis, as the reported “dynamic pricing” is expected to increase prices of drinks on offer at peak times.
Over half of Statista’s survey respondents chose Friday or Saturday as the most popular days of the week for British people to visit a pub. In the meantime, 25% of participants mentioned that they went to the bar on Wednesdays or Thursdays.
According to Stonegate Group, notices in the impacted pubs will inform UK customers of the new, higher prices, the BBC reports.
Will this choice, however, leave customers with a bad taste in their mouths? There are four Slug & Lettuce locations in London alone. Will customers be more inclined to spend their evenings elsewhere in order to avoid paying more for drinks during peak hours, given that London is a popular destination for “Thirsty Thursdays,” a day on which many cooperative workers typically drink after work with colleagues? Or will they consider the justification and be prepared to pay extra for drinks in light of the current difficulties facing the hospitality industry?
A survey conducted last year by New Food revealed that 35% of respondents “expected to be operating at a loss or be unviable by the end of 2022,” and that a third of hospitality businesses could fail by 2023.
Even though “the impact of the pandemic [is] expected to recede by Q3 2023, issues related to surging inflation are rising” within the sector, Deloitte reports that the UK’s hospitality industry is still recovering from the COVID-19 pandemic in the fall of 2023.
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Outlining the reasoning
The idea of price increases during busy periods is not new. Train tickets are more expensive during peak travel times on National Rail, which offers “off-peak” and “super off-peak” tickets during “less busy times on weekdays and all day at the weekend.”
But Stonegate Group may be jeopardizing customer confidence by introducing “dynamic pricing” in its bars. In fact, in less than a day, a tweet calling the decision a “rip off” received 11,800 views and 41 likes.
But as the Stonegate representative revealed to New Food, there is a rationale for the introduction of “dynamic pricing,” stating that the decision was made because of “the increased cost demands on the business with additional staffing or licensing requirements such as additional door team members.”
Although Stonegate maintains that its higher peak-time rates will not prevent it from offering discounted rates during off-peak hours, such as during its “Happy Hour” and 2-for-1 deals, overall foot traffic may suffer in the upcoming months, though it is unclear to what extent.