Almost half of consumers have noticed ‘surge pricing’ at busy times 

Survey finds few consumers support the growing trend of retailers adjusting their pricing in response to supply and demand

Almost half of consumers have noticed a rise in ‘surge pricing’ – when retailers increase their prices at times of peak demand.

A new survey from Barclays found 47% of consumers have noticed a growing trend of retailers adjusting their prices in response to supply and demand – also known as ‘dynamic pricing’. Its survey of 2,000 UK consumers found 32% have experienced pubs and bars raising the price of food and drink at peak times such as evenings, weekends and during major sports events.

It follows pub company Stonegate Group, which owns chains including Slug & Lettuce and Yates, confirming last month it will charge customers about 20p more for a pint of beer at some of its locations during the busiest periods to cover rising costs.

But while some pubs and bars may be charging more when trade is busier, just 8% of consumers are willing to pay more to eat and drink out at popular times, the survey found.

James Daley, Managing Director of Fairer Finance, said:

‘Consumers don’t tend to like dynamic pricing – it makes it harder for them to make informed decisions and buy at the best price. In the worst cases, it trips them up into paying more than they want or can afford.’

Those who are happy to pay surge prices are prepared to spend an average of 70p more for a pint of beer and an extra 60p for a glass of wine.

Is it time for the competition regulator to investigate dynamic pricing?

While demand based pricing is commonplace in many different consumer markets – from Uber to flights to gig tickets – advances in technology are making it possible to bring it into more of the shopping experience. For this reason, some are calling for greater transparency and for the Competition and Markets Authority (CMA) to investigate dynamic pricing.

Daley said: ‘If dynamic pricing is going to stick around, those firms who use it need to be fully transparent about the rules of the game – so that customers can make like-for-like comparisons to help them make informed choices. At the moment, there are very few rules around what is and isn’t acceptable and we think the CMA should take another look at this area, particularly as it becomes more common in ever more industries.’

Alex Neill, co-founder of Consumer Voice, said:

‘Nobody wants to pay over the odds and more widespread use of dynamic pricing will be a concern. Particularly at a time when consumers are seeing prices increase across the board and many are struggling to afford the essentials.

‘Regulators need to keep a close eye on the increasing use of dynamic pricing across more sectors to ensure it doesn’t damage competition and lead to consumers being overcharged.’

Consumers question the value of supermarket loyalty schemes 

The survey also revealed that UK consumers are questioning the value of supermarket loyalty schemes, with 67% believing retailers inflate regular prices to make promotional prices look like a better deal than they really are.

The findings follow consumer group Which? warning that up to a third of loyalty offers at Tesco and Sainsbury’s are ‘not all they’re cracked up to be’ as it urged the competition watchdog to investigate supermarket dual pricing.

Both Sainsbury’s and Tesco said Which? failed to take inflation into account when analysing prices and said they adhere to Trading Standards rules on promotions.

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