Sad Hour?

How dynamic pricing has come to a pub near you

Variable pricing has long been common practice in many industries. You expect, for example, to pay more if you want to book a holiday during school holiday season. If you visit a motorway service station, you’ll pay substantially more than if you visited the same retailer on the high street. Taxis tend to charge more at peak times and especially over Christmas and New Year.

But now some pubs from the Stonegate estate are starting to introduce variable pricing, or, as they’re calling it, ‘dynamic pricing’.

In fact, this also isn’t all that new. The same company now introducing peak-time price hikes have done so before, notably during the 2018 and 2022 FIFA World Cups

At the time, they argued that what they then called ‘event pricing’ was nothing new, and explained their reasons for increasing their prices when England were playing:

"Any increases in cost covers the requirements of additional staff, security, cleaning and those associated with satisfying and complying with varying licensing requirements, including the use of polycarbonate glasses, additional door teams and increased supervision. Therefore proportionate increases ranging from 10-50p applies on certain products in certain venues." (Source)

Whilst many may have felt these price hikes were, at best, a cheeky way of increasing profits when they knew they were going to be busiest, they only applied to periods when an England match was on the television. That at least meant those who wanted to avoid the price rises could do so with ease, and, moreover, football fans are often used to paying over the odds for a pint, particularly if they go to watch games live.

Now, though, Stonegate have begun introducing ‘dynamic pricing’ at unspecified peak times, each and every week. Naturally, this raises more issues. And drinkers are, by and large, not happy about it.

Common refrains from pubgoers echo the belief that increasing prices when you’re busiest does little to thank or reward your regular customers, and also seems like a disingenuous way to increase your profits: once you’ve had a few pints, you tend to stop looking at the price of the drink, so it’s a stealthy way to up your takings.

Of course, Stonegate have themselves stated that they believe they are acting transparently and for the right reasons. And, to their credit, they appear to have at least placed notices in the affected establishments explaining that they are using dynamic pricing and why. The notices read:

POLITE NOTICE

Dynamic pricing is currently live in this venue during this peak trading session. Any increase in our pricing today is to cover these additional requirements:

• To ensure we have enough staff so you’re served quickly

• Additional door staff for your safety

• Satisfying and complying with licensing requirements

• Extra cleaning routines and use of polycarbonate glasses

Eagle-eyed readers will notice that these reasons are very similar to the ones they stated when defending their ‘event pricing’ during the 2018 World Cup. But I have one or two issues with these reasons, and I’d question just how transparent they were being.

Firstly, if I’m visiting one of their pubs or bars where they have upped the price of their beer and I’m not served quickly despite having additional staff in to ensure that I am, what right do I have to complain or pay their off-peak price?

Secondly, their third point about complying with licensing requirements causes me some confusion. They’ve used the same line before in 2018, but then went on to explain that this clause included plastic glasses, extra bouncers and more staff and management. Correct me if I’m wrong, but they’ve laid those self same points out separately. So what exactly are these ‘licensing requirements’? Or is that just a place-holder, redundant phrase which can be trotted out as an excuse to be used carte blanche when they feel like increasing their prices?

This is just one of the reasons I would question just how transparent Stonegate are actually being here.

Perhaps the main reason, though, is that I have not been able to find anywhere their criteria for how and when prices will increase, or which roughly 800 bars and pubs from their over-4,500-strong estate will be affected.

At least it appears that they are displaying the above notice in those affected, so customers do at least have the choice to leave if they disagree with the model.

On the question of how and when it takes effect, though, think about this:

Is it that at 5pm on a Friday and Saturday, prices automatically go up? What about on unexpectedly busy week nights? And what if the Friday in question is unusually quiet – do they come down again once it is clear that there isn’t such demand for their beer? Or is there a busy-ness threshold above which prices increase? Who is in charge of such a decision? And what checks and balances exist to ensure that customers are not paying over the odds at off-peak times?

Clearly, I’m not a fan of this new pricing model, but I also acknowledge that, in a period where the hospitality industry has never struggled more, thinking outside the box to find a way to cover additional costs and, yes, turn a profit, is necessary. If Stonegate felt that they needed to increase their prices to meet these obligations, they were faced with two choices: either a blanket price rise of, say, 10p per pint, or a peak-time price rise of 20p per pint.

Their chosen model, whilst in some ways unproven and unusual in the pub industry, does at least benefit those who tend to drink at off-peak times. It remains to be seen, however, whether it was the right choice, or whether the overwhelming majority who outwardly object to the new model will continue to visit these places.

I’d love to know your thoughts on this. Leave a comment below and don’t forget to like and share this post with people you think might be interested!