Dynamic Pricing for Your Pub … (page 2)

Time Limited Drink Offering

The First Drinks’ Market Report 2011, which used figures from CGA Strategy, reported in July that 18-24 year olds going out once a week had grown from 38% to 70% … it calls them “weekend millionaires”.

They are willing to pay more for premium spirits, cocktails and champagne by the glass and as such are a good example of a customer segment that you can extract the “consumer surplus” from.

One way to do this would be to offer weekend only drinks … such as those listed above and not make them available the rest of the week. These could be priced at above the normal GP% you achieve the rest of the week.


The easiest to deal with is functions – there are definite peak demand periods for private functions – the Christmas trading period or the summer for weddings.

Take advantage of this high demand by charging extra for your facilities and services. As long as you don’t compromise the quality of your goods or the level of service you provide to your customers you can increase your margin.

Take a look at any managed chain pub group’s Christmas offerings and compare the actual product prices against comparable product prices they charge for the rest of the year.

Remember not to price yourself out of the market though!


Of course, not all pubs have function rooms, but for those of you offering food you can put dynamic pricing into effect with a little effort and planning.

The first step is to drastically reduce the number of items on your standing menu (it’s generally good practice to keep the number of items on your menu down to a minimum anyway) and make more of your popular dishes available on the specials board.

The second step is to prepare more of your dishes from freshly bought ingredients, not only does this lend itself to Dynamic Pricing, but it also satisfies growing consumer demand for freshly prepared/sourced food.

Customer Segmentation

Given that most pubs have a segmented customer base you will be able to target particular high/low spending groups at specific times of the day/ week/ month.

We all have our lunch-time, early evening, weekday, weekend, month end customers … the trick is to target your offering to your customers according to the majority (or peak demand) at any given time.

Here are a few examples:

Lunchtimes – you could be offering the same food to lunchtime customers who are “time poor” at a higher price than the same food offered to evening or weekend customers for your lower priced meals. Your lunchtime customers have a higher propensity to pay more for quick service than your evening customers.

Weekends – you could be charging more for the same food than you would during the week as your customers are different at the weekend than your weekday customers.  Your weekday customers might be predominantly single or couple diners, whilst your weekend guests might be more “party” or “special occasion” diners.

Month End Customers – we all have them, the ones that come out around pay-day. As they are truly occasional customers then offer high end meals and pricing to take advantage of their self-imposed spending habits.

How can I avoid the “Amazon” trap?

In 2000 Amazon (the on-line store) analysed customers based upon their purchase history and other information and priced books and DVDs to match individual customer’s ability to pay. As a result of a huge number of customer complaints and adverse press comment Amazon was forced to implement cost-cutting promotions to keep their customers.

Even though your customer base might be fragmented there will always be cross-over and you will need to adopt certain strategies to explain pricing differentials at different times.

Firstly by concentrating on preparing meals from fresh ingredients you have fluctuating cost prices, which determine the plate cost. Secondly you can explain that the lower pricing at certain times is part of your value for money pricing policy.

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