Slug and Lettuce owner draws backlash from consumer group over dynamic pricing

Receive free Food & Beverage updates

We’ll send you a myFT Daily Digest email rounding up the latest Food & Beverage news every morning.

A campaign group representing pubgoers has criticised the move by Stonegate, Britain’s largest pub company, to hike the price of pints during its busiest trading hours in some of its venues by 20p to offset high costs.

The owner of the Slug and Lettuce and Craft Union chains said it had introduced a “dynamic pricing” system on drinks in around 800 of its venues during evenings and weekends to help cover the cost of extra staffing, licensing requirements and additional security.

The pub group, which has 4,000 managed, leased and tenanted pubs across the UK, previously introduced surge pricing in some of its venues during the 2018 and 2022 football World Cup tournaments, but it has now made the move permanent.

An online review posted by a customer showed how punters were informed by a “polite notice” on their tables explaining that “dynamic pricing is currently live in this venue during this peak trading session”. Stonegate’s new policy was first reported by the Telegraph.

Tom Stainer, chief executive of the Campaign for Real Ale, a consumer group, called the move “troubling”, adding that it could undermine transparency on price for pubgoers if the message was not clearly displayed.

“We know pubs and brewers are having a difficult time at the moment, but we don’t think an extra charge penalising customers that want to support the industry is the right solution,” said Stainer. “Our fear is that it could convince people to stay away.”

Dynamic pricing, whereby businesses flex prices dependent on demand levels at certain times, has been commonly used in other industries, notably by airlines and hotel groups, ride-hailing app Uber and ticketing platform Ticketmaster.

For live events, the pricing model has proven deeply unpopular with fans, with 71 per cent of Britons opposing dynamic ticket pricing, according to a YouGov poll published in December last year.

“Like all retail businesses, we regularly review pricing to manage costs but also to ensure we offer great value for money to our guests,” Stonegate said. “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.”

Stonegate added that the use of “dynamic pricing” also allowed it to offer deals to customers during less busy trading hours, including 2-for-1 cocktails and discounts on food and drink.

A rival pub chief executive said the move by Stonegate set a dangerous precedent over pricing transparency, describing the use of dynamic pricing as “not good in so many ways”. “Pubs should be transparent with their customers and not rip them off when it’s busy,” they added.

Steven Alton, chief executive of the British Institute of Innkeeping, which represents the independent pub sector, said the move was “indicative of the reality of operating costs right now where pubs are trying to find any opportunity to deliver decent margins”.