Pricing isn’t the problem. It’s the symptom

Discounting is back in the spotlight - and once again, pricing is being blamed for hospitality’s problems.

This week’s issue looks at why that diagnosis may be too simplistic.

The first article responds to a recent piece by Olivia Vachon, CEO of Eatphoria, published in Propel. Her argument is that operators under pressure are reaching for discounting too quickly, commoditising their offer - and that the answer is to invest in brand. It’s a persuasive case. But it raises a question: Is “brand first” available to everyone, or only to those whose economics allow it?

I examine whether today’s pricing behaviour really signals a race to the bottom, or whether we’re seeing something closer to dynamic pricing in a sector grappling with falling footfall, rising fixed costs and uneven demand across the day. I also look at where commoditisation is real - particularly in delivery, and why operators didn’t end up there by accident.

The second article adds the data. A working paper from the Bank of England, drawing on surveys of more than 4,200 firms, shows that hospitality prices behave very differently from most other sectors. Reactive, state-dependent pricing isn’t a choice - it’s a structural feature of the industry’s cost base.

The conclusion is uncomfortable but important: The operators who endure won’t just be those with the strongest brands. They’ll be the ones whose structural economics give them the headroom to build those brands.

Read the full Weekly Briefing for the analysis behind the argument.