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Green King is one of several UK pub groups that launch or refine their loyalty programmes to seduce customers to compete with reduced alcohol consumption and intense cost pressure.
According to those familiar with the planning, chefs and brewers and Hungry Horse Chain owners are developing app-based loyalty programs for the first time.
Green King, which operates more than 2,700 UK pubs, expects the scheme to become a key growth driver, people said.
Jonathan Lawson, CEO of Pub Group Butcombe, has upgraded its loyalty program this year, said the decline in customer visits is the biggest concern for pub executives.
Refining that trend has become the industry’s “something of holy grail,” he told the Financial Times.
Mitchells & Butlers, the group behind All Bar One and Harvester Pubs, told investors one of the priorities of the year is to justify a point-based loyalty scheme.
Meanwhile, Fuller CEO Simon Emeny said the pub group is testing loyalty schemes at 30 “destination” pubs outside London.
The surge in investment highlights that pubs must rethink their strategies to attract and retain customers.
Many older drinkers have reduced or opted to buying cheap alcoholic beverages from supermarkets amid a long-term squeeze of disposable income. Meanwhile, more and more health-conscious young consumers drink less than their previous generations.
Pub groups have also been hit hard by the increased contributions to employers to national insurance that came into effect in April, a significant increase in national minimum wage.
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Stonegate, the UK’s largest pub group with around 4,500 pubs and venues, has spent around £2 million on the Loyalty app released in November 2023, featuring a game that allows customers to “spin” their free pints.
Chief Executive David McDowall said loyalty apps will become the industry’s “most important marketing tool.”
“Pubs are a little behind other parts of the hospitality industry. We’ll catch up, but loyalty is now a hot topic,” he said.
But Combe, which operates more than 120 pubs, is introducing a 20% discount on drinks purchased on Friday nights.
The pub group also operates a “Beer Club.” This will allow customers to receive a free pint for every five pints they purchase. Purchases with royalty cards amount to 22% of Butcombe’s revenue in the first quarter of this year, Lawson said.
Fuller’s, which operates around 400 pubs, primarily in London and southeastern England, plans to focus trial royalty schemes on rewards, including a 2-on-one meal deal and a complimentary glass of Mirabeau Rosé wine.
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Pub operators have followed in the footsteps of the retail industry, where royalty cards have been common since Tesco introduced club cards 30 years ago. Today, the sophisticated schemes run by supermarkets generate vast amounts of customer data and package them anonymously to advertisers for sale.
Shore Capital analyst Greg Johnson said the loyalty scheme is unlikely to succeed in the pub industry.
Wetherspoons, which already offers the lowest prices among the larger pub operators, said it has no plans to implement a loyalty scheme.
Nevertheless, the loyalty scheme will soon be “to be table stakes” for high street pubs and one that didn’t take one risk, says Saxon Moseley, hospitality lead at accounting and consulting firm RSM.
He said operators are looking for “possible ways” to grow their top line.
This story was revised to revise the name of the CEO of Stonegate.
