Pubcos still offering half-price food?
As reported by The Morning Advertiser (MA), a number of pub operators pledged to fund Eat Out to Help Out (EOTHO) equivalent discounts throughout September after the scheme wrapped up on 31 August.
The Government-backed programme allowed operators to offer customers a 50% discount – up to a maximum of £10 per person – all day, every Monday, Tuesday and Wednesday food and non-alcoholic drinks consumed on site since 3 August.
JD Wetherspoon, Star Pubs & Bars, Oakman Inns, Hall & Woodhouse and Arc Inspirations all promised to continue discounts at their sites after EOTHO saw more than 64m meals claimed across some 84,700 venues according to the Treasury – which benefitted from the scheme to the tune of around £250m.
Far fewer trips out, smaller groups and more cautious and distanced interactions have left pubs and bars with lower footfall, seeing less spending and in some cases distant guest relationships.
This shift in consumer behaviour, coupled with ever stricter Government guidelines – such as the new 10pm curfew – has added pressure to an already challenging long term outlook for the sector.
However, there are positives we can and should take from the crisis.
Firstly, the Eat Out to Help Out (EOTHO) scheme successfully got cautious consumers off their couches and back into their local pubs across the UK.
The discount and scale of the scheme helped to incentivise spending on meals out, and in doing so boosted the fortunes of millions of struggling pubs and bars.
In fact, Cardlytics data found pubs to be the standout winners of the scheme, with spend in pubs actually recovering to pre-pandemic levels in the third week of the scheme, while visits were up 11% compared with 2019.
But while spend and visits have seen some improvement, one challenge for pubs remains – with EOTHO no longer drawing in hungry customers, how can pubs wean customers off heavy discounting and get them spending from their own pockets once more?
Experience is everything
Pubs need to create nostalgia and remind guests why they love their local.
Whether it is the range of craft beers they have on tap, the friendly service or even the entertainment on offer, pubs must play to their strengths to draw guests back in and get them spending.
That could be through bringing back much-loved dining specials, putting on popular entertainment or just creating a friendly, welcoming atmosphere that will bring their regulars back and tempt new customers in.
Experiment with tech
As guests look for more hygiene approved, contactless serves and payment options, investing in seamless technology and payment processes will go a long way to helping them feel comfortable and more willing to visit.
Now is a prime opportunity for pubs to develop apps for ordering and payment, giving guests the option of a minimal contact service and providing pubs with the ability to integrate third party offers and incentives, whilst also capturing guest spend data to inform their recovery strategy.
The ease and speed of new technology, to the right customer, can be just as important as a big saving.
Revive your marketing
To truly drive up spending and ride out the crisis, pubs need to focus their efforts on reaching high-value, frequent visit guests rather than infrequent deal hunters.
That means thinking carefully about the places and channels where these customers reside and targeting them better.
Investing in marketing or offers on deal websites might lead to a short-term uplift in spend but long-term pubs who go down this route are likely to lose out as deal hunting customers move on to the next best discount.
Pubs should consider the daily touchpoints of high value customers, such as their bank accounts, and target their marketing and offers there.
Once you’ve got a new customer, attention must turn to converting them into a regular.
High value repeat guests can typically account for as much as 50% of sales – that’s a huge percentage and is more important than ever now.
Consider a series of lower value multi-redemption ‘bounce back’ offers to engage customers and bring them back. Don’t be drawn into investing in one big ticket discount, which will leave the customer just hanging around for the next big offer.
While EOTHO was a great initiative to get customers comfortable with dining and drinking out again, returning to 50% off discounts would be catastrophic for pubs in the long run. It will make the race to the bottom even quicker and more drastic, with many pubs unable to keep up.
Ultimately only pubs that are committed to building up brand loyalty in the long term, and investing in meaningful relationships with their guests, will be the ones that succeed and survive another potential lockdown.