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opinion pubs

People think pubs are ripping them off

“I personally believe pubs/bars have priced themselves out of business.”

When you spend a lot of time talking to people who like pubs, and are sympathetic to their situation, it’s startling to come across a statement like that.

And this from the same conversation:

“The key question is why can Wetherspoons sell beer at £2-3 a pint, and some pubs sell at £6? It’s not just about landlords’ rent.”

We spotted those on LinkedIn in comments from an accountancy firm MD on a post from an insolvency expert – so these are people who understand business and can do sums.

We can hear publicans groaning from here.

In the context of supply chain issues, rampaging inflation and staff shortages, let alone the long-term structural problems caused by the pubco model, how much control do most really have over the price of a pint?

That’s not to say, of course, that some people don’t do quite well running pubs. We find ourselves thinking of a businessman who owned several pubs in Cornwall and would turn up for inspection in a huge Range Rover with personalised plates, gold cufflinks flashing.

It’s perhaps no wonder his customers got the impression that running a pub might be a nice earner and occasionally grumbled about the price of a pint.

As one pub landlord said to us a few years ago, “Even if I did have a Ferrari, I wouldn’t let my customers see me driving it, know what I mean?”

In general, though, it is fair to say that by the time you’ve covered the very cost of selling a pint in most settings, your margins will be pretty slim.

That’s why so many pubs try to compensate with food, the margins on which might give them a little bit more for manoeuvre.

Well, that is, until food also started going up in price.

“It cost me £110 to take my wife and two 7-year-olds to the pub for tea on Friday. Who can afford to do that often?” asked another commenter in the LinkedIn chat above.

For a while, pub food had an advantage: because it was allowed – no, expected – to be heartier and less fancy, it could fill a gap in the middle.

A decade or so ago, a Sunday roast in a pub might cost, say, £8-10, and you’d expect to pay less than a tenner for fish and chips. In fact, researching this on Twitter, we found someone in 2012 expressing fury at having paid £13 for fish and chips in a pub.

Now… those prices have barely changed. Because (a) those prices are almost hard-wired in people’s brains; and (b) nobody has any money.

Unless you’re confident that you’ll be able to continue to attract well-off customers, and the rest can go hang, putting up prices is a bold move.

So, what’s gone? The publican’s margin.

It’s helpful in this context to give people running pubs chances to talk openly about the challenges they face.

Tom Kerridge’s BBC documentary series did a good job of highlighting the gap between drinkers’ ideas of a fair price and the reality of many pubs’ accounts.

Pieces like this, in which a pub landlady talks about impossible fuel bill increases, can also be a reality check.

Perhaps what we need is more publicans to be more open about how they work out the asking price of a pint, if they feel able to do so.

Yvan Seth, who works as a beer distributor, had a go at this back in 2014, including a snappy infographic.

We’d certainly be happy to share more information on this if anyone feels like sharing with us privately.

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Generalisations about beer culture marketing opinion

Price as substitute for quality in unfamiliar territory

“In the absence of information, people tend to take a price of the unfamiliar product as a signal of its quality, so high prices do not diminish the quantity demanded very much. When information is provided, the signalling content of the price diminishes. As a result, demand becomes more elastic. In particular, informed consumers see no reason to pay more for the new product given that it has the same ingredients as the familiar one. The effect of the information is thus to encourage more people to switch from the substitute product to the target one at low prices, and vice versa at high prices.”

That’s an extract from an academic paper (PDF) on the behaviour of purchasers of medical products in Zambia, but you’ll encounter versions of this argument everywhere from self-help books on how to sell! sell! sell! to articles in the business press.

The conclusion often drawn is that, perhaps counter-intuitively, if you price your product higher than the competition, many consumers will assume yours is better and worth the extra money.

Conversely, if your product is too cheap, it might seem suspicious: “Hmm. What’s wrong with it?”

Does all of this also apply to beer?

Twenty years ago, we were certainly aware of the aura that surrounded Premium Lager, and Pete Brown has written memorably about the damage Stella Artois did to its brand by reducing the price.

But drinkers these days have lots more information to go on, from beer style to ABV, from hop varieties to brewing location. All or any of these might override price in the decision making process.

And, of course the actual relationship between price and quality in beer is complex: there are lots of bad expensive pints out there, and some really good ones that are relatively cheap.

Our suspicion is that price might be a proxy for quality in situations where none of the brands are familiar, and the only other information is price; or (as this paper suggests) where the choice is between broadly similar products under the same brand name: Carlsberg, or Carslberg Export?

With all this in mind we find ourselves once again thinking about the Drapers Arms, where not only is branding held at arm’s length but also the price structure is flat. As a result, we’ve probably tried a greater variety of beer there than anywhere else, even allowing for the fact this is where we do most of our drinking by default.

Categories
opinion pubs

Cash or Cashless, the Problem is ‘Only’

Both cash-only and cashless-only are barriers, and both tend to be driven by the needs of the business rather than what works for customers.

We got talking about this in the pub last night because of a poll from the Beer O’Clock Show:

The arguments against card-only have been piling up for some time:

  • it excludes the poorest in society
  • it discriminates against older consumers
  • it plays into the machinations of global tech giants
  • it contributes to the tracking and influencing of our behaviour.

But on the ground, in daily life, we very much understand the appeal of paying by card in pubs, bars and bottle-shops.

It saves us having to wander round suburbs or industrial estates looking for cash machines, and makes it easier for us to manage our various bank accounts and budgets, with every transaction recorded and reported.

And not taking cards can be excluding in its own way. One publican in a cash-only business recently told us they’d been thinking about getting a card machine purely because they were aware of constantly turning away young people who expected to be able to use cards. About half of them were willing to find a cash machine and come back, but the rest just moved on down the road.

A lot is made of the cost of processing card payments but depending on the size of the business, cash can be just as expensive to handle, and certainly less convenient.  It can require extra staff-hours for counting and banking, and needs transporting, either at considerable cost (secure pickup) or risk, with a member of staff walking to the bank with a sack of readies. (I’ve managed cash-heavy concerns and write from experience. – Jess.)

The presence of cash can also make premises more vulnerable to crime or, rather, advertising total cashlessness can be a good way to deter it.

And some of the objections cash-only businesses have to cards seem to use to be a hangover from a decade ago when banks charged a lot more for the service, and when people who paid by card in the pub were amateurs and freaks.

It used to mean five minutes of faffing around with signatures and pin numbers, holding up the line. Sometimes, there’d also be another minute or two of trying to get up to the limit for paying by card without an additional charge – “What are your most expensive crisps?” Nowadays, it’s a quick one-handed tap and done, and its people fiddling with coins and waiting for change who seem to cause a delay.

Fundamentally, though, we bridle at the idea of businesses doing only one, or only the other, because it’s convenient for them, rather than offering both with the convenience of their customers in mind.

Categories
pubs

PUB LIFE: Generally by the Half

Keg taps.

A sad-eyed veteran of perhaps 28 shows a newbie, baby-faced and keen to please, around behind the bar.

The Vet points to the keg taps.

“Now, these stronger ones we generally only serve by the half.”

“So I should never serve them by the pint?”

“Well, not never. Generally.”

The Vet leans on the bar and gives a Han Solo smirk.

“As long as they’re not rat-arsed, and not acting the arsehole, you can serve them pints. Obviously, if they’re absolutely arseholed, don’t serve them anything.”

“Cool, cool, yeah, yeah, yeah.”

“But if they do insist on a pint, warn them about the price before you pull it, because if they weren’t acting like arseholes before, the might start when you tell ’em it’s eight quid a pint.”

FNG’s eyes pop.

“Eight quid?”

“Well, like I say, we do generally serve it by the half.”

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News pubs

News, Nuggets & Longreads 29 September 2018: Runcorn, Rochefort, Rules of the Tavern

Here’s all the reading about beer and pubs that grabbed us in the past week, from PR disasters to art installations.

Last year Kirst Walker wrote up a pub crawl of Runcorn’s Victorian pubs with her trademark spark; this year, she notes plenty of changes, giving the exercise a certain academic interest as well as pure entertainment value:

Time for the Lion, where everybody knows your name! Last year’s winner was where we we would end the night once more. I didn’t double up last time but as we’d already had time bonuses, sambucca, and sandwiches I threw caution to the wind. Alan bought a round of pies like a freaking billionaire and we had a group de-brief with plans to repeat the operation next year on the same weekend… The Lion has lost much of its original room layout since it was refurbished and part of it converted into houses, but it’s still the type of traditional corner pub which is a hub for the community, and in my opinion it as better to try and save the pub than keep the entire sprawling space.


Price list in a pub.

We tend to ignore clickbaity brouhahas over individual expensive pints these days but Martin Steward at Pursuit of Abbeyness has waited for the dust to settle before reflecting on one such recent incident, producing a slow-cooked opinion rather than a flash-fried ‘hot take’:

The most remarkable thing about the price of Alesmith Speedway Stout Hawaiian is not that it is five-times higher than the price of Rochefort 10, but that it is three-times higher than Alesmith’s ordinary Speedway Stout… That premium buys you some toasted coconut flakes, some vanilla and some rare Hawaiian Ka’u coffee beans, which are indeed three-times more expensive than your bog-standard joe… If you can taste the difference after those beans have had beer fermenting on them, I complement you on your sensitive palate. If you think it justifies a 200% premium, I have a bridge to sell you.