Greene King to Sell 150 Pubs Amid Cost Pressure
Greene King plans to sell up to 150 pubs in March as chief executive Nick Mackenzie moves the chain against five years of rising costs and weaker consumer behaviour. The decision affects part of a business that runs roughly 2,600 pubs across Britain, including 840 under direct management, and puts site ownership and operation into sharper focus for landlords, staff and suppliers.
150 pubs will be sold in March, while 300 more are being shifted into a separate division, with half of those destined to become leased or tenanted establishments and half marked for disposal. Mackenzie said the move reflected “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” and warned he was “worried” that Britons may tighten their belts on non-essential spending such as pub visits.
Greene King’s 2,600-pub footprint
3.6 per cent revenue growth to £2.5bn last year and an operating profit of £94m gave Greene King a stronger financial base than the £16m loss it made the previous year. That rebound has not stopped the company from reworking its estate. Last year’s Budget changes to business rates saw bills soar for thousands of pubs, and Mackenzie 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.”
£10m has also gone into Greene King’s London portfolio this year, with investment at venues including the Blue Posts in Soho and The Railway Tavern on Liverpool Street. At the same time, the chain is building a new £40m brewery in Bury St Edmunds, due to launch next year, which shows capital is still flowing into parts of the group even as other pubs move toward sale or a different operating model.
Mackenzie’s portfolio reset
The change is part of what Mackenzie described as a regular assessment of the portfolio, with the company getting ahead of the game in a changing economic landscape. Greene King’s ownership base is Chinese interests, but the immediate issue for the market is simpler: a large pub operator is trimming and reshaping its estate rather than carrying weaker sites through another period of rising labour, goods and tax costs.
For pub-goers, the practical effect is that some familiar sites may end up leased, tenanted or sold outright, while Greene King keeps pushing cash into selected venues and a new brewery. For investors and sector suppliers, the harder read is whether the £94m operating profit can keep absorbing the cost burden Mackenzie described if consumer confidence keeps weakening.
