British pubs are facing desperate times. Some of them have succumbed to rising costs, while others are trying to battle it by opting for a cab-share-like model of hiking drink prices during the busiest hours to offset costs.
Stonegate Group, which owns the likes of Slug and Lettuce and Craft Union, has introduced a "dynamic pricing" model on drinks during the evenings and weekends, The Telegraph reported Monday. It's Britain's biggest pub group with about 4,500 venues peppered across the country, some of which have remained popular and made money for the company even in the most trying of times.
The new surge pricing model will affect 800 of its locations across the U.K., and the price increase of about 20p per pint would help meet additional staffing requirements as well as licensing and security needs at the pubs.
The move has received backlash on social media from customers who have complained that the move could mean fewer people visit pubs at popular hours.
One user wrote on X, formerly Twitter: "How about charging 20p less when they are less busy? These prices only seem to work one way, not the other."
Another user said: "It's already happening at my local pub - something like £3.40 ($4.24) a pint before 7pm, £4.20 ($5.24) after. It's backfired I think, it's often empty after 7pm," according to the BBC.
Elsewhere, one LinkedIn user wrote that this pricing strategy, akin to what's seen in cab or flight bookings, work only in some settings.
"Dynamic pricing operates well in classic supply-demand situations, for things like Uber rides, airline and train tickets," the user said. "So unless they are planning to limit the amount of beer etc this amounts to nothing more than profiteering / a really quick way to p#*% people off to me."
Stonegate pubs offer a "polite notice" to let customers know when surge pricing is in place, indicating that drinks will cost more. The notice also has a list of expenses the additional costs would help cover from pub safety to paying workers.
A harsh reality for pubs
Pubs have faced a period of turmoil—in just the first three months of this year, 150 pubs in England and Wales shut down. In 2022, about 560 pubs closed amid rising energy bills and higher maintenance costs.
Consumer group Campaign for Real Ale said it acknowledged the difficulty that businesses face, but said that dynamic pricing could ultimately hurt pubs by confusing patrons.
“This is a make-or-break time for the beer and pub industry. Many pubs are fighting to survive and have had no choice but to increase prices in response to a cost-of-business crisis, customers tightening their belts, sky high energy prices and unfair business rates," CAMRA's CEO Tom Stainer told Fortune in a statement.
“Many pubs already struggle to display prominent price lists for customers, which are more important than ever for people who may be struggling to afford a pint with friends and family."
This isn't Stonegate's first rodeo with differentiated pricing during peak times—it did so in some venues during the FIFA World Cup in 2018 and 2022, per the Financial Times. But this time around, the conditions are different—Brits are facing a steep cost-of-living crisis and food inflation, which has already limited their ability to spend on discretionary goods.
Dynamic pricing is common on apps like ride-hailing service Uber, where demand levels determine the price of a service. Even ticketing platforms that help Brits secure concert passes have similar a system. But according to a YouGov survey in December, this strategy prices customers out as, causing 71% of Brits to oppose the idea.
But for its part, Stonegate has defended its decision to introduce varied pricing during busy times so it could continue to offer promotions like happy hours, 2-for-1 cocktails and more, at other times of the week.
"This flexibility may mean that on occasions pricing may marginally increase in selective pubs and bars due to the increased cost demands on the business with additional staffing or licensing requirements such as additional door team members," a spokesperson at Stonegate Group told Fortune, adding that it still wanted to offer "great value for money" to its customers.
