Be bold: push up prices

With all the cost pressures licensees have bearing down on them at the moment, the big question going through everyone's mind must be: How much can I raise my drink prices?

For the past three years, licensees have put up their beer by no more than the national inflation rate - around 3%. Yet their general costs have been rising at much more than that. This, combined with rent rises, is relentlessly squeezing the standard of living for licensees.

It is only because they believe customers will vote with their feet and go elsewhere, or stay at home, that licensees are prepared to endure this hair-shirt. And no one can blame them for such an approach when off-trade prices have been falling so dramatically.

The gap between the two sectors has widened to an extent that can prove to be an embarrassment, however good the pub. And, sadly, it could widen further. For even though the national brewers can hardly be making any margin from their grocery friends, they seem somehow, through internal

efficiencies, to still come up with a new cheaper deal that puts even more pressure on pubs.

There are two options open to pubs. Put through to customers just another small beer rise and hope to offset the other cost pressures by driving new business, often with an enhanced food offer. Or be bold and aim to push up prices by more than 10p a pint, explaining to customers that these are the harsh facts of life for hard-pressed licensees today.

This might just be the year to be bold. There has been so much coverage of the energy price hikes that most customers will readily appreciate how that affects their pub. They are likely to be as receptive now as they'll ever be. Mention also how much it's cost to get the new licence. And throw in the fact that extended hours also come with a price tag.

It's a tough ask, especially when consumer spending is under pressure. But unless you try, you'll never be able to get back the kind of margin that's necessary for a decent living. Back up the rise with some sweeteners in the pub and make sure your staff are attentive and smiling like never before. If you're as good as you think you are, you've every chance of pulling it off.