Greene King to promote 150 pubs as ‘worries’ Brits might in the reduction of on non-essential spending
Greene King, one of Britain’s largest pub chains, has announced plans to sell 150 pubs and restructure 300 additional sites amid rising costs and shifting consumer spending habits.
Greene King is set to put 150 pubs up for sale (file)(Image: jewhyte via Getty Images)
Greene King’s chief executive has blamed the firm’s decision to put 150 pubs up for sale on the “unprecedented” costs currently hammering the hospitality sector.
The pub behemoth, amongst Britain’s biggest chains, revealed plans to offload up to 150 pubs in March, with chief executive Nick Mackenzie telling City AM the decision was prompted by soaring costs and “changing consumer behaviour”.
The company, which also produces Greene King IPA, Old Speckled Hen and Belhaven beers, plans to shift 300 pubs into a separate division, with half destined to become leased or tenanted establishments and the other half marked for disposal.
Delivering the Chinese-owned pub company’s annual results, Mackenzie said: “Long-term permanent reform from government is essential to ensure that unprecedented costs do not hold back the enormous potential of the sector.”
He told City AM the sell-off of pubs was part of a regular assessment of the Greene King portfolio, but that the chain opted to get ahead of the game in response to a changing economic landscape, reports Business Live.
Mackenzie blamed “the cost environment that our industry has faced for the last five years, which is increased employment costs, increased cost of goods through events like the Ukraine war and now obviously what’s happening in Iran and the general economy”.
It comes as Greene King deployed AI-powered assistants to work in its pubs with a “virtual assistant” called “Charlie”. The AI is used to handle telephone calls at several locations, including venues across London.
A spokesperson for Greene King told City AM said they have “been trialling an AI conversational voice assistant in select pubs and restaurants as we look to leverage digital capabilities and drive efficiencies across our estate.”
Mackenzie also took aim at business rates, following changes to the tax in last year’s Budget that saw bills soar for thousands of pubs and left Chancellor Rachel Reeves scrambling to offer a £300m concession.
Labour pledged business rates reform in its manifesto but has yet to deliver comprehensive changes to the tax.
The pub boss said: “Business rates are unbalanced for our sector so we want the reform that was promised, and the fundamental reform is to rebalance the level of business rates taxation that our sector pays.”
Mackenzie, who serves on the government’s hospitality advisory board, said he is pressing Labour to slash taxes on beer and reconsider its implementation of guaranteed hours rules for workers on zero-hour contracts.
Last month, several leading trade bodies warned the government that its current proposals to crack down on zero-hour contracts would trigger a surge in youth unemployment.
As consumer confidence plummets to its lowest level in more than two years, Mackenzie said he is “worried” Brits may tighten their belts on non-essential spending such as pub visits.
However, Mackenzie remains optimistic that this summer’s World Cup will boost Greene King’s takings, as the government pledges to allow pubs extended opening hours. Greene King recorded a 3.6 per cent increase in revenue to £2.5bn last year, delivering an operating profit of £94m, a dramatic turnaround from a £16m loss the previous year.
The pub giant is presently building a new £40m brewery in Bury St Edmunds, which is set to launch next year. The company poured £10m into its London portfolio this year, with prominent venues including the Blue Posts in Soho and The Railway Tavern on Liverpool Street amongst those to receive investment.
Greene King operates roughly 2,600 pubs throughout Britain, with 840 under direct management, while the rest function through franchise or tenancy agreements.
Founded by Benjamin Greene in Bury St Edmunds in 1799, Greene King was previously traded on the London Stock Exchange before being acquired by Hong Kong tycoon Li Ka-Shing’s CK Asset Holdings in a £2.7bn takeover in 2019.
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