Price is becoming an increasingly high profile weapon for pub and restaurant players in the battle for customer loyalty. But value rather than just cheapness remains the real issue for the sector.
This week, Mitchells & Butlers, Britain's biggest pub and restaurant operator, said it would drive sales with aggressive "value-for-money" price promotions on food and drink throughout its pub and restaurant estate.
The end result is that M&B expects to see prices across its 2,000 units down by 1% to 2% by the end of the year. "We are detecting much more consumer price sensitivity. We will be going for the volume premium rather than the price premium," said chief executive Tim Clarke.
M&B wants to emulate the big supermarket groups in the grocery market, driving down prices, driving up volume while using its increasing buying power to create marketing and purchasing efficiencies. It's the Wal-Mart doctrine that JD Wetherspoon has already pioneered in UK pubs.
But as M&B knows from trying to compete with Wetherspoon, with its own Goose brand in the cut-price beer market, low prices alone are not enough. The focus for M&B will be in their own areas of strength - suburban pubs, where its Ember Inns trading format is quickly taking root, and pub restaurants, where Harvester, Toby and Vintage are already well entrenched. Food will play a lead role in attracting the consumer.
Interestingly, Urbium, the late-night bar operator which owns Tiger Tiger, says it has spotted what it thinks is a new phenomenon - happy hour drinkers eating a discounted meal alongside their drinks as they wind down in the early evening.
Urbium's managing director, Robert Cohen, says the surge in demand for early-evening food was a surprise. He has seen a distinct shift in spending patterns towards food, particularly between 5pm to 7pm, following a menu revamp in his 17 venues in London's West end.
What Urbium has done is get the value equation right, for what Cohen admits is a challenging 20 to 35 age range "influenced by the Jamie Oliver … with less cultural barriers and a greater desire for quality and flavour" and much more money-conscious.
The mix of price and quality with environment and convenience - it's where those customers want to be with their mates – works for Urbium.
Price will be an increasingly important lever for operators across the sector. But price alone can be a blunt instrument, and particularly when applied just to alcohol can attract trouble and attention the industry can do without.
Pubs and restaurants may not be pure retailers in that customers aren't taking a product home with them. But they sell an experience, and the value of that experience is key - even if it is as transient as grabbing a bite to eat on the way home from work.
This week, Mitchells & Butlers, Britain's biggest pub and restaurant operator, said it would drive sales with aggressive "value-for-money" price promotions on food and drink throughout its pub and restaurant estate.
The end result is that M&B expects to see prices across its 2,000 units down by 1% to 2% by the end of the year. "We are detecting much more consumer price sensitivity. We will be going for the volume premium rather than the price premium," said chief executive Tim Clarke.
M&B wants to emulate the big supermarket groups in the grocery market, driving down prices, driving up volume while using its increasing buying power to create marketing and purchasing efficiencies. It's the Wal-Mart doctrine that JD Wetherspoon has already pioneered in UK pubs.
But as M&B knows from trying to compete with Wetherspoon, with its own Goose brand in the cut-price beer market, low prices alone are not enough. The focus for M&B will be in their own areas of strength - suburban pubs, where its Ember Inns trading format is quickly taking root, and pub restaurants, where Harvester, Toby and Vintage are already well entrenched. Food will play a lead role in attracting the consumer.
Interestingly, Urbium, the late-night bar operator which owns Tiger Tiger, says it has spotted what it thinks is a new phenomenon - happy hour drinkers eating a discounted meal alongside their drinks as they wind down in the early evening.
Urbium's managing director, Robert Cohen, says the surge in demand for early-evening food was a surprise. He has seen a distinct shift in spending patterns towards food, particularly between 5pm to 7pm, following a menu revamp in his 17 venues in London's West end.
What Urbium has done is get the value equation right, for what Cohen admits is a challenging 20 to 35 age range "influenced by the Jamie Oliver … with less cultural barriers and a greater desire for quality and flavour" and much more money-conscious.
The mix of price and quality with environment and convenience - it's where those customers want to be with their mates – works for Urbium.
Price will be an increasingly important lever for operators across the sector. But price alone can be a blunt instrument, and particularly when applied just to alcohol can attract trouble and attention the industry can do without.
Pubs and restaurants may not be pure retailers in that customers aren't taking a product home with them. But they sell an experience, and the value of that experience is key - even if it is as transient as grabbing a bite to eat on the way home from work.
