Nexum: £5 all-inclusive deal a loss-leader
Nexum Leisure adopted supermarket-style loss-leader tactics to get punters in to Escapade in Newport for its £5 all-inclusive sessions.
The controversial deal, which grabbed widespread media attention when it was launched, ran for five weeks at a price of £5 on a Wednesday evening.
The deal will now jump to £7 for standard drinks or punters can upgrade to £10 for entry to the VIP bar and a premium range of products, including Becks, Smirnoff Ice, VK Blue, Smirnoff Vodka and Jack Daniels. However, customers can still pay £5 if they book in advance online.
"We start to make money around the £7.50 mark," said Nexum chief executive Paul Kinsey. "Most people upgrade to the £10 ticket.
"We used the £5 deal as a short-term loss-leader. Margins are lower on these nights but it is better than being shut. It creates a lot of noise about our venue and helps to drag people back in on other nights."
Kinsey added that the deal had not created any problems to date. "The police don't really want us to run these deals but they trust us to run them properly.
"Newport is a blue collar town where unemployment is running at around 40%. People are looking for value.
"I don't think the offer is irresponsible. You could hire a caravan with a group of friends for a holiday and get drunk on cheap supermarket booze every night for a week for less than £60. We don't create the market, we just respond.
"What I really want is a minimum price set for alcohol. In my view a minimum price and an ID card would solve all the problems. Kids are governed by how much they have in their wallet.
"But we know the best we can hope for from the Government is a voluntary code on supermarket discounts, which the supermarkets will probably find a way round. We know the Government is not going to take on Tesco."
• Read Ewan Turney's take on his visit to Escapade's £5 all-inclusive night: The acceptable face of all-inclusive offers?
