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‘Unhappy Hour’: U.K. Pub Chains Adopt Surge Pricing for Pints

A pint of beer may cost more during peak hours at some pubs owned by Britain’s largest pub company, which has in recent weeks adopted surge pricing.

About 800 of the 4,000 pubs owned by the company, Stonegate Group, are either using “dynamic pricing,” in which prices rise at times of increased demand, or may use it in the future to help cope with higher costs for staffing and licensing requirements, Maureen Heffernan, a spokeswoman for Stonegate, said on Tuesday.

Stonegate owns the popular pub chains Slug & Lettuce and Craft Union. Ms. Heffernan said that the timing of surge pricing, in which a pint of beer would cost about 20 pence (25 cents) more, would vary by pub, but that generally prices would be higher on weekends and evenings.

In July, the average price for a pint of draft lager was 4.31 pounds (about $5.37), up from £4 a year earlier, according to Britain’s Office for National Statistics.

Customers have become accustomed to surge pricing across various industries, including retail and travel. But some Britons said applying it to pubs went too far.

Pete Favelle, an I.T. consultant in Abergavenny, Wales, said that surcharges made sense for products that had limited availability, like flights or hotels, but that charging extra for pints at certain hours was “just a grab for cash.”

He said he hoped the policy would fall flat because of the difficulty in implementing it. “Their poor front-of-house staff have to explain to enraged customers that, actually, their next pint now costs an extra quid because it’s got a bit busy,” he said, using a colloquial word for “pound.”

Zhe Liu, an assistant professor of operations management at Imperial College Business School in London, said companies relied on surge pricing to increase revenue or to lower demand, or both. He said it was realistic that Stonegate was raising prices to cover increased costs, since it had to employ additional staffing during peak hours.

He said that, while the strategy may increase revenue, it could also alienate customers and that “the long-term effect on customer demand should also be considered.”

Some companies appear to be listening to complaints from customers. AMC Entertainment, the world’s largest theater chain, in July abandoned plans to charge more for movie seats depending on their location, which it rolled out as a test in March in New York, Illinois and Kansas. Lyft, the ride-hailing company, may also be moving away from surge pricing. Its chief executive, David Risher, said last month during the company’s earnings call that surge pricing had meant that the company had missed out on riders who did not want to pay higher prices.

“It’s particularly bad because riders hate it with a fiery passion,” Mr. Risher said. “And so we’re really trying to get rid of it.”

Ms. Heffernan, the Stonegate spokeswoman, said the new pricing strategy applied to pubs all over Britain. She added that the company had previously raised prices during England’s soccer matches at the World Cup. The new pricing strategy was reported earlier by The Telegraph.

British pubs have struggled with high inflation in recent years, with many having had to shut their doors. Stonegate reported a loss of £23 million ($28.7 million) in the six months ending in April, citing Britain’s cost-of-living crisis.

Tom Stainer, the chief executive of Campaign for Real Ale, which represents pubgoers in Britain, called the new pricing policy an “unhappy hour surge” and said it would not help bring consumers back to pubs after the pandemic dented business. He said that pubs had historically offered communities an affordable place to gather and socialize, but that drinks had become increasingly unaffordable.

“Pubs are places where you are expected to walk in and know what you’re going to be paying for a pint, regardless of the time of day,” Mr. Stainer said. “If we saw this idea spreading, I can’t see that as being something that is really going to encourage people to support their local pubs.”

https://www.nytimes.com/2023/09/13/business/surge-pricing-drinks-slug-lettuce.html ‘Unhappy Hour’: U.K. Pub Chains Adopt Surge Pricing for Pints

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