A growing number of restaurant and pub operators are using regional price differentiation, MCA analysis has revealed.
MCA found 62% of operators are applying price differences between their London and Midlands sites, which is up 6 percentage points (pp) on the previous year.
A similar proportion (61%) of brands also apply price differentiation between their London and Northern sites.
Perhaps unsurprisingly, Londoners pay the most at branded operators, with consumers spending on average 30p more per dish; while customers in the Midlands pay on average 31p less per dish.
JD Wetherspoon charge a premium of 20% per dish on average in London compared to the Midlands, the equivalent of £1.33.
Wetherspoon is followed by Hungry Horse, O’Neill’s and Brewdog, all of which apply an average of more than 10% per dish in London.
Italian restaurant group Rossopomodoro applies the greatest average price difference, with an average 28% premium per dish in London compared to the North, equivalent to £1.63.
The research reveals Newcastle customers pay £1.50 less than Londoners at Rossopomodoro for a portion of bread.
Customers at Slug & Lettuce pay a premium of 15% per dish on average in London than in the South, equivalent to £1.03, with a strong premiums of 47% in London on two brunch dishes.
MCA advised operators that increased price differentiation could help deal with cost inflation of 3-4%, with scope for more brands to introduce price alterations.
Girish Srikantha, senior analyst at MCA, said: “Although use of price differentiation is growing between operator’s London and regional sites, I would not be surprised if the tool is active between sites in the same region e.g. Central and outer London perhaps.”
