Luminar chief Peter Marks reveals discounting has boosted sales
Marks, who led the consortium that bought Luminar out of administration last December, said the firm’s refusal to discount in the past “killed the company” because it was chasing the “dream” of higher GPs.
Speaking at an Association of Licensed Multiple Retailers (ALMR) autumn debate in Nottingham, Marks highlighted the price sensitive nature of Luminar’s target customers, saying 45% are either unemployed or students.
He said the nightclub sector has “never been quieter”; the company would sell 2.2 drinks per customer on average before licensing reform, and the figure is now 1.8.
“All too often desperate operators will suddenly do a big discount night and it’s difficult not to follow them,” said Marks.
He stated that Luminar’s approach is to discount prices in order to create footfall, and once this has been reached, increase prices gradually every two to three weeks.
“We call it 10p ‘till it hurts!”
He detailed the extent of discounting at its 55 sites. Of the 200 trading sessions across the estate per week, there would be 10 “very heavy” discounts, and 15 “works in progress”.
The promotions are limited in time and often “early doors” only, and not at weekends.
“Volumes are up 20% since January because we’ve taken this policy,” Marks said. “The profit has grown as well and the income.”
Marks said the nightclub industry has “scored quite a lot of own goals” by keeping prices high to suit the “city agenda” of continued year-on-year growth.
“Luminar went bust simply because it refused to do any discounting and it chased the dream of GP increasing. That’s what killed the company.”
Delegates appeared to have been persuaded by the arguments of Marks and Nick Crossley, operations director at Sizzling Pub Company, who both spoke against the motion that discounting drives volumes but damages value.
Alex Reilley, managing director of Loungers, also argued for the motion, saying that discounting “devalues” the business. He said Loungers’ promotions such as Tapas Tuesday, which offers three tapas dishes and a glass of wine for £8.95, is an example of a promotion that “doesn’t undermine our offer”.
