There's no doubt that times are tough for the great British pub, with 161 closures reported across the country in the first quarter of this year alone1, combined with £322.5m of new employment costs to consider since the last autumn budget and the rising cost of national insurance2. At the same time, we're seeing a widespread cultural shift, particularly amongst the younger generations.
About a third of young people have reported cutting back their alcohol intake over the past twelve months, typically citing budget and health as driving factors (or just wanting to drink less!)3. But despite this shift, the sector remains valued at £24.9bn (with this expected to rise to £25.7bn by 2028)4, and post-work drinks remaining a consistent source of revenue, and pub meals remaining popular despite an overall drop in dining out5.
However, just as we saw during COVID lockdowns, the sector never fails to demonstrate its resilience and creativity when challenged. In my role at Exponential-e, I regularly speak to pub owners and managers (purely in a professional capacity!) who're eager to build on the lessons learned throughout lockdowns and the success of the first digital transformation initiatives that resulted. And hopefully England can go all the way and give the pub industry a revenue boost!
So, I feel we can confidently say that one of our most beloved national institutions isn't going anywhere, but it's not going to be enough to assume drinking and dining habits will remain the same, or that patrons' expectations around the overall pub experience are the same as they were just a few years ago. Specifically, here are the four ways I would anticipate the sector evolving in the years ahead…
Operational efficiency will be a top priority
Rising labour costs, particularly the increase in both National Insurance and the National Living Wage - mean the sector as a whole is having to do more with less, ensuring available staff can continue delivering exceptional service without putting their own health and wellbeing at risk. A detailed answer to these challenges lies outside the scope of this article, but when the highest level of operational efficiency is required, technology definitely has a role to play by reducing waste, automating routine processes and administrative tasks, and providing streams of real-time staffing information that support better decision-making at the micro and macro levels. All of this will ultimately lead to tangible cost savings that can be reinvested in the patron experience.
Patrons' expectations will continue evolving
Along with the shift in drinking habits that we touched on earlier, it's also important that we're cognisant of the different ways in which patrons access services and information. We very much live in an interconnected society, with younger generations preferring everything to be readily accessible through their smart devices. However, the pub sector is already very much ahead of the game here, having rolled out app-based service at scale during COVID. This means we have a strong foundation to build on, gaining a better understanding of patrons' ordering habits and utilising this to tailor services, menus, and marketing activities accordingly.
Infrastructure must be designed for scale
Far too many pubs that are part of chains or groups are still relying on fragmented, multi-vendor environments when it comes to connectivity, systems, and communications. Beyond the considerable ongoing expense this presents, it puts far too many pubs at risk of being unable to trade if their local infrastructure goes down. In our post-cash society, if you can't take card payments, you can't do business, which impacts both your profits and your reputation.
Furthermore, when central offices must manage hundreds of sites across the country, all utilising their own legacy infrastructure, it creates an unacceptable operational burden.
For this reason, we are seeing an increasing number of chains and groups accelerating their long-term digital transformation plans, working with trusted technology partners to phase out siloed legacy systems in favour of fully consolidated infrastructure that provides full control and visibility of all sites, combined with in-built redundancy to ensure trade is never disrupted by an outage, even in particularly remote locations.
Security must be inherent in the design
Of course, as pubs embrace the next generation of interconnected infrastructure, their tech-savvy patrons expect them to take action to ensure their personal data remains secure, before, during, and after each visit. Security ecosystems must take into account payment card data, guest WiFi networks, loyalty databases, employee records, and much more. This is not negotiable - the regulatory landscape is increasingly stringent about the way customer data is handled at every touchpoint, and the penalties for non-compliance are steep.
We just have to look at the number of organisations who've been left unable to trade and suffered potentially irreparable reputational damage after falling victim to cyber attacks in recent years to see how serious this situation is. Digital transformation initiatives cannot afford to treat security as a bolt-on. Instead, it must be inherent in the design of all infrastructure, with corporate security policies automatically applied wherever possible and regular training provided for all staff.
From pouring pints to delivering experiences
While there are certainly challenges ahead, the UK's pubs are well-placed to weather them, ensuring these spaces remain a beloved social hub for future generations. While younger people are certainly drinking less, quality experiences never go out of fashion, and the pubs that will continue to thrive are the ones who embrace this fact, looking for new ways to bring people together in unique environments.
While it may feel contradictory to talk about digital transformation at the same time as human experiences, automating routine processes and opening new channels for interaction with patrons is all about ensuring staff are free to focus on the personal touches that turn first-time patrons into loyal, repeat ones. A perfect example of what can achieved when people and technology come together!
If you're keen to accelerate your own digital transformation after reading this, let's arrange a conversation.
Frequently Asked Questions
How can digital transformation help UK pubs?
Digital transformation can help pubs improve operational efficiency, reduce waste, automate routine tasks, support cashless payments and create more personalised customer experiences.
Why is connectivity important for modern pubs?
Reliable Connectivity supports payment systems, app-based ordering, guest WiFi, loyalty platforms and operational systems, helping pubs continue trading without disruption.
How can pubs improve operational efficiency with technology?
Pubs can use technology to automate administrative tasks, monitor staffing levels, reduce waste, analyse customer behaviour and make faster decisions across single sites or multi-site estates.
Why does infrastructure need to be designed for scale?
Scalable infrastructure helps pub groups consolidate fragmented systems, improve visibility across multiple sites and maintain service continuity during busy trading periods or local outages.
How can pubs protect customer data?
Pubs can protect customer data through Cyber Security, secure payment infrastructure, protected guest WiFi, access controls and security policies applied consistently across all digital systems.
Why is security important for hospitality digital transformation?
Security must be built into hospitality infrastructure from the start to protect payment data, loyalty databases, employee records and guest services from cyber threats and compliance risks.
How are customer expectations changing in the pub sector?
Customers increasingly expect convenient digital services, app-based ordering, reliable WiFi, personalised offers and seamless experiences that combine traditional hospitality with modern technology.
What technology should pub groups prioritise?
Pub groups should prioritise resilient Connectivity, secure payment systems, Cloud Services, Cyber Security, guest WiFi, analytics platforms and systems that provide central visibility across all sites.
1. British pubs closing at a rate of almost two per day in 2026 - BBC News
2. Why Are UK Pubs Closing in 2026? The Employment Answer
3. Why are one in three Brits drinking less alcohol in 2026?
4. UK Pub Industry Outlook 2026: Costs Rise but World Cup Could Boost Sales | Morningstar UK
5. Pubs under pressure as eating out growth slows in 2026
Like a great many of you, as soon as we had some sunny weather recently, I was all set to break out the barbecue. But my plans were soon scuppered when I realised I needed a new can of Calor gas. Undeterred, I checked for local stockists on Calor's website and got on the phone to check who had some available. On each occasion, no-one answered the phone.
So, after multiple failed attempts, I just got in the car and drove to every petrol station in the area until I found someone with Calor in stock. So, our barbecue did happen in the end, but my little adventure actually demonstrates a wider challenge that the retail and hospitality sectors (and others) are facing at the moment.
With retail and hospitality environments, most things have moved online (e.g. bookings, opening hours, or to check stock if click-and-collect is available), but there are still lots of scenarios where people still call up. For example:
"Sorry, I'm running 10 minutes late, but I want to keep my reservation."
"Are you dog friendly?"
"Are you open this bank holiday?"
The challenge here is that many businesses in retail and hospitality (pubs and restaurants, for example) are unlikely to be running dedicated call centres, and their staff are going to be on their feet all day, attending to guests rather waiting by the phone. If a customer can't find the information they're looking for online and isn't able to speak to a member of staff, then their options are to risk it and make a booking or order regardless, continue to wait on hold, or simply take their business elsewhere. None of these options make for a great customer experience.
So, how do we strike the right balance between operational efficiency and that all-important human touch? While it may seem contradictory at first glance, agentic AI potentially holds the answer.
AI agents have improved to the point where their voices are convincing enough to serve as the first point of contact over the phone, just as is now the case on many websites. This way, a caller is greeted straight away by a friendly voice rather than an automated menu or the dreaded on-hold music - an immediate improvement in the overall customer journey. But this is the clever part... Voice recognition and sentiment analysis enable AI agents to make the decision as to whether a call would be best handled by a human agent and, if so, direct the caller to the right person.
So, let's say a restaurant gets a call from someone who wants to make a reservation... The AI agent can automatically check which tables are available, set out the options, and make the booking without a human member of staff needing to get involved. On the other end of the spectrum, if a customer calls with a question that requires a specialist's input or wants to book a party for 100-plus people, these will be directed straight to the appropriate member of staff.
So, when it's applied strategically, with the ideal customer journey in mind, agentic AI offers rich opportunities to optimise customer
contact over the phone in the same way as many organisations are already doing across other channels, not only in terms of making sure someone is there to answer the phone, but also making sure their desired result is achieved as seamlessly as possible.
When AI agents manage customer interactions in the way describe above, they're not only capable of intelligently routing the conversation, but also transcribing it, pruning anything irrelevant (small talk, for example), and uploading the whole thing to the CRM system - something that would not be practical to do manually, even for dedicated contact centre teams. This can be combined with interactions across other channels to build deep customer profiles that can support personalised marketing, as well as practical things like automated reminders about reservations, or when a requested item has come back in stock.
This also opens up new ways to measure agent performance and wellbeing, ensuring everyone is delivering the expected quality of service, and customer satisfaction targets are consistently met. By analysing the data gathered throughout customer interactions across all channels, trends can be identified, successes built upon, and measures put in place to remedy any recurring problems, such as providing additional training or support where necessary.
There's understandably a lot of hype around AI platforms right now, but customer contact is one of the areas where it is most definitely proving truly transformative, ensuring that customers are always able to make contact through whichever channel they prefer, and enjoy seamless, stress-free resolutions. When we step back and take an objective look at the different points of contact with customers, we will get a clearer understanding of where agentic AI can add the greatest value, adapting to the technology to suit our customer service goals rather than the other way around.
Finally, some food for thought... Someone recently created an AI chatbot to call every pub in Ireland and enquire about the cost of a pint of Guiness, using this data to generate a price map of the whole country. How many of those interactions already involved bots talking to bots, and how likely is this to become a standard part of business' customer interactions? Interesting times for the entire sector for sure.
If you're interested in exploring potential opportunities to implement agentic AI, or any other aspect of your customer contact systems and processes, just get in touch (even by phone, if you prefer!).
Exponential-e & Retail
Our Retail brochure offers a comprehensive overview of how we draw on a deep understanding of the sector's singular challenges, an evolving technology ecosystem, and a highly consultative approach to offer bespoke solutions that help staff deliver their best for every customer - both online and in person.
An exceptional customer journey extends far beyond the initial point of sale. And nowhere is this truer than for subscription-based businesses, whose continued success is based on delivering consistently seamless, high-quality experiences throughout each customer's time as a subscriber - from the initial sign-up through to the point where they decide to terminate their subscription for whatever reason.
Indeed, these new models have transformed the way many businesses interact with their customers, applying lessons learned from established subscription-based services, such as gyms and streaming services. From both traditional retailers and ecommerce specialists offering scheduled deliveries of household essentials, groceries, and entertainment products, to the now-ubiquitous software-as-a-service model and premium subscriber options on popular social media platforms, there are numerous channels for forward-thinking businesses to establish 'sticky' streams of income, with more still to reveal themselves.
However, the rules around offering and managing subscriptions and memberships of any sort are about to change, particularly with regards to cancellations…
Throughout 2026, the Competition and Markets Authority (CMA)'s regulations around buyer protection and autorenewals are going to evolve, as part of the existing Digital Markets, Competition and Consumers Act 2024 (DMCC Act), in order to help consumers avoid getting trapped in unwanted subscriptions. Organisations found to be in violation of these new regulations can expect to face fines of as much as 10% of their annual revenue.
As a result, any retailer that offers subscriptions or memberships of any kind must be aware of how these changes will impact them in the months ahead and, adapt their systems and processes to ensure they remain fully compliant with all applicable regulations, and - most importantly - ensure that they are still able to offer a world-class experience for their subscribers.
So, what's about to change and how can we best prepare?
- Specific pre-contract information must be provided. The DMCC Act distinguishes between key pre-contract information and full pre-contract information. Both must be provided in full at the initiation of the contract, or the customer will not be bound by the stated terms. Compulsory elements include:
- Full details of payments, include frequency and amounts.
- Minimum total liability.
- Schedule of reminder notices.
- Full cancellation rights.
- Reminder notices will be compulsory. It is no longer enough to assume a customer will automatically want to renew their subscription. Reminder notices must be sent in advance of the renewal date.
- Cooling-off periods will also be compulsory. This applies to both new subscriptions and renewals. Customers must have 14-day window to cancel their subscriptions without penalty.
- Cancellations must be as simple as possible. Cancellation instructions must be provided, and the process must not include any unnecessary steps. This also applies to online subscriptions. Confirmation must be provided within 24 hours.
There's certainly a lot to consider here, but rather than treating these changes as onerous compliance obligations, why don't we treat them as an opportunity to reconsider the overall subscriber journey, and look for new opportunities to enhance it?
Traditionally, when a customer wishes to cancel a subscription or membership, they've done so by speaking to an agent, who will then have the opportunity to discuss their reasons for cancelling and potentially offer some perks to change their mind. In light of the changes mandated by the new DMCC, this is unlikely to be practical in the majority of cases, when customers are able to unsubscribe with a single click. This has the potential to create a serious loss leader for subscription-based businesses whose customer engagement strategy is based on an initial discount or free gift (e.g. the first month's delivery is free, after which the subscriber pays the usual rate), as there is nothing to stop customers hitting 'unsubscribe' right before their first payment is due.
However, with agentic AI and intelligent automation currently transforming both the contact centre environment and the wider customer journey, numerous opportunities have presented themselves to ensure full compliance can seamlessly co-exist with personalised experiences that maximise long-term retention and build brand loyalty.
For example, if someone is looking to cancel via a page on your website and you have already implemented a chatbot function that they use to request a cancellation, the bot can automatically engage a real customer service agent, who can discuss the reasons for their cancellation, provide any hands-on support they need, and (ideally!) offer any perks or resolutions that will entice them to stay.
If your contact centre environment and chatbot functions have been intelligently integrated (as they should be!), these interactions can then be utilised to drive further optimisations, such as ensuring cancellation requests are routed to agents who have the best records of retaining customers, or ensuring agents don't invest their time and effort on accounts that have no realistic chance to renewing their subscriptions. For example, AI-based analytics can identify trends in customer data, such as individual addresses that have signed up for multiple trials but never made a purchase, which will allow agents to focus their attention where it will prove most effective.
And of course, the best approach to minimising cancellations is ensuring customers never want to cancel to begin with! All the data gather through customer interactions - whether it's with an agent or chatbot - can help build up more accurate, comprehensive customer personas that support highly personalised offers, helping to maximise the number of subscription renewals.
Above all, while regulations evolve and customer expectations naturally shift, the value of a personalised experience, delivered by an attentive, knowledgeable professional is a constant for the Retail sector. If we keep this in mind while making full use of the possibilities AI-powered automation offers us, the opportunities will be tremendous.
If you'd like to take a deep dive into your own customer journey and identify where the intelligent application of new technologies could make that all-important difference, just get in touch.
Exponential-e & Retail
Our Retail brochure offers a comprehensive overview of how we draw on a deep understanding of the sector's singular challenges, an evolving technology ecosystem, and a highly consultative approach to offer bespoke solutions that help staff deliver their best for every customer - both online and in person.
© 2026 Exponential-e Ltd. Reg. No. 04499567, Reg. Address:100 Leman Street, London E1 8EU