Saturday, October 03, 2009

Vaccuous observations from people who evidently know nothing of the economics of running pubs. They are wrong. It is 'foolhardy' NOT to raise prices when margins are eroded so much that your business no longer returns a living profit by retailing goods.

Over the last decade tied publicans have been particularly forced between a rock and a hard place: their wholesale supply prices imposed by rapacious pubcos have steadily increased faster than inflation which has eroded their profit margins such that they no longer make enough money out of their sales to cover overheads.

Retailers (publicans) have not been able to wear putting their prices up two or three times a year and instead have absorbed many increases and lost margin. Duty increases are widely reported, wholesale increases are not. It makes sense to consolidate price position when customers know you're under pressure - whether or not the duty is only .07p per pint it's an opportunity to get customers on your side instead of making them think you're raking it in and living a life of Riley.

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