Greene King boss says cafes and delivery apps are our new rivals

People swapping draft beers for cappuccinos or ordering burgers and pints via Deliveroo instead of their local are posing a new threat to pubs, according to the boss of Greene King.

Nick Mackenzie, who runs the beer and pub chain with 2,700 sites across the UK, accepts there are other businesses struggling for consumers’ money as a growing proportion of the population abstain from drinking alcohol.

“They spend their free time at the bar, yes. You know, people prefer to go to coffee shops,” he says. “Like delivery, they are part of the rival group [apps]”

There are currently more than 14,000 cafes and coffee shops across the UK. Pubs still number more than 40,000 and the 57-year-old is adamant that pubs are unbeatable as a place to bring people together.

speaking to the BBC Big Boss Interview podcastThe Greene King CEO was quick to reiterate the special status pubs enjoy in the UK, emphasizing that “community” is as much a selling point as the beers, wines and spirits they sell.

So will pubs, which are inextricably linked to the sale of booze, be able to attract the younger generation to their premises, with nearly a third of under-25s and 20% of all Brits not drinking alcohol?

After stopping by the New Explorer pub just off Oxford Street, Mackenzie makes a point of highlighting the non-alcoholic beer on tap, even noting that low-alcohol and no-alcohol beers still make up only a small portion of overall sales.

“This means that if you’re not drinking, you can come to the bar, meet your friends, do the same things everyone else does at the bar,” he says.

“I know from experience, and certainly from my own family, that young people still go to bars and drink, but we also have to adapt to trends around wellbeing.”

Greene says the “coffee offering is now reliable” at King’s venues as the industry as a whole adapts to an environment where customers come just for coffee or food.

“Bars now create much more comfortable environments rather than feeling like they used to. [being] I sat in a dirty bar.

“I know not all bars are like this,” he hastens to add.

While she’s not yet committed to drinking the trending iced matcha or pumpkin spice latte, Greene says King bars are selling more hot beverages than ever before.

The industry’s trend away from booze-focused “dirty bars” towards food-focused gastro pubs has been in place for some time. ONS data shows that the share of bar company staff working in kitchen-focused roles overtook those behind the bar in 2014 and has increased since then.

Recently, there has been an increase in the number of bars and pubs built around “competitive socializing”, where dates or groups split time between the bar and games such as crazy golf, shuffleboard or axe-throwing. This hospitality subset has more than doubled from 280 bars and pubs pre-pandemic to around 600 now, according to data from estate agents Savills.

Some Greene King bars are also now expanding into this area. Mackenzie’s resume could be useful if the company moves into more bar entertainment.

Before King, Greene ran Merlin Entertainment, which owns Thorpe Park, Madame Tussauds and Legoland, and which also attracts his two children.

“My kids benefited from that when they were little; they had theme parks to go to. And when they turned 18, I went back to bars, so they were pretty happy about it too,” he chuckles.

Speaking ahead of Chancellor Rachel Reeves’ budget, Mackenzie said he hoped there would be “no surprises” from this budget at a time when the government plans to raise taxes to plug a multibillion-pound deficit in the country’s finances.

Hospitality and retail businesses were hit hard by the Chancellor’s decision to increase the amount employers pay for National Insurance per employee in last year’s budget.

His message to Reeves is: “Give us some breathing room, but actually do the things you said you would do in your manifesto to solve the business rates problem.”

Labor has pledged to reform the business rates system, a tax on commercial premises that could cost businesses on Britain’s high streets millions of pounds.

“This sector pays more taxes than others, OK? And the business rate is particularly disproportionate. And governments have said they’re going to change that… now they need to do it,” says Mackenzie.

A government spokesman said pubs, restaurants and cafes were vital to local communities.

“So we’re lowering licensing costs, lowering business rates and helping more hospitality businesses offer curbside beverages and outdoor dining.”

Details of business rates reform are expected to be announced before the end of the year.

The BBC speaks to the bosses of some of Britain’s biggest companies to find out the stories behind the people who lead them.