Tuesday, 1 March 2016

A demonstration of price differences

Last Saturday I went on the anti-Trident demo in London. Amazing turn out: Trafalgar Square was packed with people of all ages, various ethnicities and a variety of political and religious persuasions. Despite the numbers, I managed to meet my friend Geoff, who lives in Hounslow.

After the demo, we had an hour before I had to catch my bus back to Merseyside, so we decided to go for a drink in the Clarence on Whitehall. As well as a few predictable beers such as Sharps Doom Bar and Atlantic, and Adnams Bitter and Ghost Ship, they had a beer from Twickenham Brewery. I decided to have that, as I hadn't had it before, while Geoff had Doom Bar. It was a pleasant pint, though to my taste nothing special, and I was quite happy to have a second one when it was my round.

Until it came to paying, of course: £8.80 for two pints. I know London prices are steep, but that surprised me. In my local in Southport, I can buy three pints for that amount with 70p to spare.

I don't understand why Southern, particularly London, prices are quite so steep. My friend Alan was on holiday in the West Country several years ago, and he arrived home in time for a quick pint in our local. I happened to be there, and when he returned from the bar with a pint of Wadworths 6X, he told me he had had the same beer a couple of days earlier in sight of Wadworths brewery in Devizes, Wiltshire. Despite a difference in delivery distance of 200 miles, 6X was actually cheaper in Southport.

Me in the Clarence after the demo
(expensive pint not shown)
Make of that when you will, but I find it difficult to accept that all the price differences across the country can be attributed solely to higher costs. A significant factor must be the capitalist tendency to put prices up as high as the market will stand. That might be an acceptable business practice, but it tends not to go hand in hand with value for money.

18 comments:

  1. I'm not sure why you've posted that link, but it doesn't fully answer my point.

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  2. Costs are higher Nev, but so is turnover. Not sure that the difference can be readily explained other than charging what the market will stand.

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  3. About the same time, myself and Curmudgeon were in Stockport drinking Sam Smith's Old Brewery Bitter at £1.80 a pint...

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  4. Good to see you Saturday, Nev, and I think you've hit on what is causing the closure of so many London pubs - the price of a pint. Here in Hounslow, when I first came in 1997, there were 9 pubs in easy walking distance; now there are only 4.By way of comparison with the price you paid for two pints on Saturday, you can buy 4 pints of Ruddles County for £8-20 in Hounslow Wetherspoons - an establishment you have enjoyed visiting in the past.Visitors to central London will find Wetherspoons Leicester Square and Whitehall rather pricy, but Wetherspoons Charing Cross Road was reasonably priced the last time I visited.

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  5. As an example I buy 2 pubs. One for £100k, One for £500k

    Both require a return on investment. Same percent but the later 5 times the former in cash.

    My running costs, power, wages, stock (beer and nuts) are the same.

    If I get 5x the return from the latter pub are my prices higher than in the former pub?

    Or is capitalism evil?

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    Replies
    1. Well, if you try to get government to limit the maximum prices businesses can charge, you end up like the socialist paradise of Venezuela where they've even run out of bogroll.

      If you couldn't charge more than three quid for a pint in central London, there wouldn't be many pubs left there.

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    2. An interesting little fantasy about price controls, Curmudgeon. Back in the real world, my post simply suggests that a pricing system based on what the market will stand tends not to go hand-in-hand with value for money.

      As for prices and pub closures in London, I will simply refer you to Geoff's comment. He has lived in London for 19 years and is better placed to judge than us Northerners.

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    3. Nev, can you guarentee all beer will be 1.80 like Sams if scruffpot Britain hating terrorist loving Corbyn gets in?

      If so I might be up for this socialist utopia.

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    4. The major cause of pub closures in London seems to be ever-increasing property prices, which mean that it makes financial sense to redevelop a pub as a block of flats.

      Plenty of blogs suggest that pubgoing is actually thriving in London in a way that it isn't in most other parts of the country.

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    5. Yes, but pubs in town and city centres tend, by and large, to do better than suburban and country pubs; those bloggers are mostly writing about pubs in centres, not the huge areas of suburbs that you'll find around London.

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  6. I think the problem is Nev, that you chose a pub in a prime tourist spot, right at the top of Whitehall, and just off Trafalgar Square. Had you called in at the Sam Smith’s owned Chandos, on the opposite side of the Square, and close to St Martins in the Field, then you could have had a much cheaper pint.

    Wages and business rates are higher in London, than in other parts of the country, and this accounts for the higher prices many pubs charge, but I do think £4.40 for a pint of very ordinary bitter is something of a rip-off.

    Years ago, I remember an acquaintance telling me he had walked out of a pub and left the two pints he had ordered sat on the bar. The reason for his behaviour was the high prices the pub was charging. He argued that as there was no price list displayed; he was under no obligation to pay for the beers; provided he left them untouched. When the barman asked the perfectly reasonable question, “What am I supposed to do with these?” this character quipped “Drink them yourself”, and promptly walked out the door!

    Food for thought, or unreasonable behaviour?

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  7. Do Sainsburys or Tesco charge a third more for their products in London than in the North? I don't think so.

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    Replies
    1. Yes, but it's a basic economic principle that the opportunity to charge a price premium for goods that are consumed at the point of sale is much greater than that for goods that can be transported and stored.

      Try buying a coffee in central Paris or an ice-cream in a holiday resort in summer.

      And also bear in mind that, in less busy and affluent locations, pubs often keep going on very slender margins. You can't have it both ways.

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    2. We can't, no, but it seems pub owning companies can.

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