Thursday, 14 November 2013

Seize the day

Pete Brown is always worth reading, but I can’t help getting the impression that in this piece for the Morning Advertiser he meanders round a number of points without ever really managing to hit the nail on the head.

The basic premise is reasonable enough, that pubs need to look at what people actually want rather than just trying to find ways to market their existing offer more effectively. However, on a number of points he’s guilty of somewhat muddled thinking.

For a start, I don’t really get the point that pubs in locations which can support coffee shops are not opening until 4 or 5 pm. Yes, a lot of pubs do that during the week, but generally in locations where there is little or no passing trade. If a High Street can generate the trade for Starbucks or Caffé Nero, then it can do the same for pubs. Certainly round here the vast majority of town and city centre pubs open all day. It may be a London thing, but flicking through the London pages of the Good Beer Guide I can’t find many pubs that don’t open at least from noon. Perhaps it’s just a generalisation based on one particular pub that annoys him.

He then argues that pubs need to look at reinventing themselves to appeal to the type of customers who are using coffee shops. In fact, many have to some extent – how many town centre pubs now have clear plate-glass windows, sofas and pastel colours? The still pervasive idea that pubs are gloomy dives hidden behind frosted glass containing hacking old drunks ranting on about the Four Canals is now far more myth than reality. And, as Steve Wilson says in the comments, if you try to appeal to new customers, you have to be very careful that you don’t just end up alienating your existing ones. Plus, for various reasons, the trade derived from people “just popping in for a quick one” is now much diminished from what it once was.

He also comes up with the familiar canard about pubs overcharging for soft drinks. As I argued here, nobody goes to pubs primarily because of their choice of soft drinks, the demand is highly inelastic and in any case pub soft drink prices are broadly comparable with “family restaurants”. It may well be in pubs’ interest to offer a better range of soft drinks (or anything else), and it may also be a good idea to avoid prices so high they give the impression of ripping customers off. But cheaper soft drinks won’t bring floods of new customers into pubs, and if you cut soft drink prices, what are you going to charge more for? Beer?

I get the impression from this piece that Pete is drawing lessons from the Inner London pub market and seeking to apply them to the rest of the country, whereas in reality the way the two work is becoming increasingly divorced.

12 comments:

  1. You were wrong about soft drink prices then, and you are wrong now.

    They don't need to put up beer prices in order to put down soft drink prices, only sell more soft drinks. Something they might do if punters didn't feel stung.

    As people don't want to drink during they day, but do want a bit of lunch or a coffee or just a sit down with the paper Pete Brown makes a good argument as to why many pubs are empty whilst coffee shops are full.

    Unfortunately, Mudge, there is a wide gap between pubs being successful ongoing businesses and being what you would like them to be, which was last viable in or around 1954. The pub as you understand it is by and large dead. There is merit in your view that the smoking ban was a related factor in that.

    There is more people that want a drink in the evening, so long as it's weekend. Other than that, anyone for a latte?

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  2. No, Cookie, the price elasticity of soft drinks in pubs is very low. The vast majority of them are consumed either with meals or by people who are members of parties including alcohol drinkers. Halve the price, and the increase in volume would be trivial.

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  3. Personally when I go to the pub with my family the cost of soft drinks for the kids is a factor. (I know this is an horrific and implausible thought to some of your readers, kids in pubs), but as mine are well behaved we possibly would buy them another drink, but more importantly is that I would spend more also.

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  4. No Mudgie, What is being Pete Brown is talking about isn't existing customers buying a diet coke because they are the designated driver, but new customers popping in during the day.

    Freelancers wanting free wifi and a cofffee and currently sat in Starbucks. For them demand is elastic.

    The pubs you loved are dead. All Pete Brown is saying is that the building might as well be a Starbucks. He has a point.

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  5. Isn't most of the success of coffee
    shops due to take-outs these days?

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  6. Well, Starbucks aren't exactly cheap, are they? And I would assume your average laptop-wielding freelancer is earning enough dosh that a cheap Coke in a dumpy pub isn't really going to tempt him.

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  7. A pub near me had a £300K refurb recently and is now making money hand over fist. However, they experimented with opening at 9.30am for coffee and cakes. Didn't work so they stopped it.

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  8. The struggling pubs in my town,what few remain,tried to do
    early starts with "big brekkies" and cafe lattes.Idiots,McDonalds and Subway soon cured their idiocy,they opened up from 6 AM.
    Some pubs will survive as they have attracted the smoking drop outs and non smoking drifters from
    the 30+ closed pubs nearby
    A bit like bluebottles fluttering from one dried out turd to the next freshly laid one.Blinkered
    Judasgoats evading the obvious
    reason for our pubs decline.

    One fine day

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  9. A sensible commercial policy seems to be price the first soft drink quite high, but then allow unlimited refills. Given that most people won't want refills, you're getting your return, but still appearing generous to the designated driver or the non-drinker in a party of boozers in for the night.

    I see Spoons are now doing this - but only until 2 pm.

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  11. "Well, Starbucks aren't exactly cheap, are they? And I would assume your average laptop-wielding freelancer is earning enough dosh that a cheap Coke in a dumpy pub isn't really going to tempt him"

    - and there, I think, Mudge lies the flaw in Pete Browns idea. That pubs can tempt people away from Starbucks or Costa, neither of which are "value". Maybe it's an image thing. Pubs are not quite the aspirational places flogging a lifestyle in the way coffee shops are. Price isn't the big factor in the offer.

    Unlimited refills, as you say, offer an impression of value. Given that most people would say pubs are poor value on soft drinks and people are drinking less, giving people a reason to go to a pub when they don't want to booze is not a bad idea. The pub as a place to meet friends, rather than place to get a drink.

    Spoons do a decent enough coffee but I always feel a bit of a twat going in there for one. It's holding up the bar for a start. I'm not sure a mix of the abstentious enjoying a brunch and early doors alkies really works.

    It's an idea, though. Not a new one. I think it does the rounds every so often when a blogger notices Starbucks is rammed and the pub is empty.

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  12. Pubs lost the plot the moment they started acting like arseholes to the U21s about 10 years ago.

    Well, now those people are their major target demographic and they think pubs are miserable places.

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