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Greene King is among several major UK pub groups launching or revamping loyalty programmes in an attempt to lure back customers, as the industry contends with declining alcohol consumption and intense cost pressure.
The owner of the Chef & Brewer and Hungry Horse chains is developing an app-based loyalty programme for the first time, which could offer customers discounts on food, drink and accommodation, according to people familiar with the plans.
Greene King, which operates more than 2,700 UK pubs, expects the scheme to be a key growth driver, the people said.
Jonathan Lawson, chief executive of pub group Butcombe, which is upgrading its loyalty programme this year, said the declining frequency of customer visits is the biggest worry for pub executives.
Improving that trend had become “kind of the holy grail” in the industry, he told the Financial Times.
Mitchells & Butlers, the group behind All Bar One and Harvester pubs, has told investors that one of its priorities this year is to trial a points-based loyalty scheme.
Meanwhile, Fuller’s chief executive Simon Emeny told the FT the pub group was testing a loyalty scheme at 30 of its “destination” pubs outside London.
The flurry of investment highlights how pubs are having to rethink their strategies to attract and retain customers.
Many older drinkers have either been cutting down or opting to buy cheaper alcoholic drinks from supermarkets amid a prolonged squeeze on disposable income. Meanwhile, increasingly health-conscious young consumers are drinking less than previous generations.
Pub groups have also been hit hard by the increase to employers’ national insurance contributions, which came into effect in April, and significant increases to the national minimum wage.
Stonegate, the UK’s largest pub group with about 4,500 pubs and venues, has spent roughly £2mn on its loyalty app, which was released in November 2023 and features a game where customers can “spin to win” a free pint.
Chief executive David McDowall said loyalty apps would become the industry’s “most important marketing tool”.
“Pubs have been a little behind the rest of the hospitality industry . . . We are playing catch-up. But loyalty is now a hot topic,” he said.
Butcombe, which operates more than 120 pubs, is introducing a 20 per cent discount on drinks bought on Friday evenings, historically the busiest time of the week for pubs.
The pub group also runs “beer clubs”, whereby customers receive a free pint for every five pints of Butcombe beer purchased. Purchases with loyalty cards equated to 22 per cent of Butcombe’s sales in the first quarter of this year, Lawson said.
Fuller’s, which operates roughly 400 pubs mainly in London and south-east England, is planning to focus its trial loyalty scheme on rewards — such as two-for-one meal deals or a free glass of Mirabeau rosé wine — and personalised offers.
Pub operators are following in the footsteps of the retail industry, where loyalty cards have been commonplace since Tesco introduced the Clubcard 30 years ago. The sophisticated schemes now operated by supermarkets yield vast quantities of customer data, which they package up and sell to advertisers on an anonymised basis.
Greg Johnson, an analyst at Shore Capital, said loyalty schemes were unlikely to be as successful for the pub industry, which is more fragmented than the supermarket industry.
Wetherspoons, which already offers the cheapest prices of any large pub operator, said it had no plans to introduce a loyalty scheme.
Nevertheless, loyalty schemes were quickly “becoming table stakes” for high street pubs and those that did not offer one risked missing out, said Saxon Moseley, hospitality lead at accountancy and consulting firm RSM.
He said operators were looking for “any way possible” to grow their top line.
This story has been amended to correct the name of Stonegate’s chief executive
