Luminar, Britain's biggest nightclub operator, has told local authorities and the police that it will start cutting drink prices by up to 30 per cent if they fail to prevent heavy discounting by town centre pubs.

The company said that although the return of discounted drink offers could increase alcohol-related crime and disorder in many towns, the failure of the authorities to take action against the biggest price-cutters had left it with no choice but to follow suit.

Stephen Thomas, chief executive, cited discounting by rival pubs and clubs as one of the factors behind Luminar's sharp fall in trading in recent weeks, alongside the worsening economy, unfavourable weather and club refurbishments. Euro 2008 also had an impact, as clubbers stayed at home to watch the football on television.

Mr Thomas said that the price of petrol was “hitting our customers in the pocket” and it was right that the company should “share their pain. This financial year is set to be one of the most difficult in recent times.”

Luminar suffered a 2.4 per cent fall in like-for-like sales in the 19 weeks to July 16, although Mr Thomas said that the decline had worsened to 7 per cent in the past nine weeks because of “a sharp decline in footfall”.

He said that he had issued several warnings to police and local authorities about the discounting problem, but they had taken no action. Although the authorities have no control over prices, they can act through the licensing laws if they believe that premises are being run irresponsibly.

“We've tried to hold the line, as we take our role as responsible retailers very seriously, but if all around you are throwing caution to the wind in terms of price, you have to follow suit.” He said that recently he had launched trials on Friday nights at the company's clubs in Rotherham and Wellingborough, cutting drink prices by up to 30 per cent. “Business has shot through the roof,” he said.

Mr Thomas said that although he was prepared to repeat the cuts throughout the company's estate of almost 100 clubs, many of which trade under the Oceana and Lava & Ignite brands, he planned to wait until the authorities had assessed the trials.

Mr Thomas said that the group had maintained its gross margin during the first 19 weeks, although it expected margins to come under pressure if it decided to widen its discounting trial.

Sobering statistics

30% The level of drink price cuts threatened by Luminar

2.4% The company’s fall in like-for-like sales in the 19 weeks to July 16

7% The worsening sales decline in the past nine weeks

100 The number of nightclubs run by Luminar across the country

Source: Times Archive

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