Greene King is weighing up a recent spherical of job cuts as Britain’s second-largest pub chain grapples with rising taxes, greater working prices and mounting strain on client spending.
The 227-year-old firm, which operates round 2,600 pubs throughout the UK, is known to be reviewing its head workplace and central capabilities, with as much as 100 roles doubtlessly affected. No last determination has been taken.
The transfer would mark the second main restructuring in below two years. In 2023, Greene King reduce important numbers of head workplace and field-based employees, saying the overhaul was crucial to assist the enterprise “thrive in difficult occasions”.
Based in 1799 by Benjamin Greene in Bury St Edmunds, the corporate is one in every of Britain’s oldest brewing and pub teams, identified for manufacturers together with Greene King IPA, Previous Speckled Hen and Abbot Ale. It operates a mixture of managed pubs, which it runs straight, alongside leased and tenanted websites.
Like a lot of the hospitality sector, Greene King has confronted a pointy escalation in prices. Vitality payments, food and drinks components and wages have all risen considerably lately.
Trade leaders have been significantly vocal about adjustments to employer nationwide insurance coverage contributions (NICs), together with the decreasing of the edge at which they’re paid, a transfer that disproportionately impacts sectors reliant on part-time and lower-paid employees.
Many pubs are additionally bracing for greater enterprise charges from April. Whereas the federal government has launched a help package deal, campaigners argue it is probably not enough to offset the burden.
On the similar time, alcohol consumption in Britain has softened as households face tighter budgets and shifting well being developments.
In December, Greene King’s chief government Nick Mackenzie warned of a “fixed layering of prices” and urged ministers to supply additional help for the sector.
Regardless of a 3.2 per cent improve in gross sales to £2.45bn in 2024, Greene King reported a pre-tax lack of £147.1m in its newest accounts. Adjusted working income stood at £198m. The corporate employed round 1,000 head workplace employees in the course of the yr.
Greene King was taken non-public in 2019 in a £2.7bn deal by Hong Kong-based CK Asset Holdings, owned by billionaire Li Ka-shing.
The group has continued to put money into its property, together with plans to relocate its historic Bury St Edmunds brewery to a brand new £40m web site by 2027, the place it would produce each conventional cask ales and newer beer ranges.
Greene King isn’t alone in slicing prices. Rival Stonegate Group, Britain’s largest pub operator and proprietor of the Slug & Lettuce chain, has additionally appointed advisers to restructure its operations. It has already reduce 95 roles, with additional reductions below assessment.
Stonegate, owned by non-public fairness agency TDR Capital, is reportedly contemplating promoting a package deal of as much as 1,000 pubs to cut back debt and has been linked to a possible £1bn valuation.
For Greene King and its friends, the problem is obvious: balancing funding in heritage manufacturers and property upgrades with the cruel actuality of rising prices and fragile client demand in Britain’s pubs.
