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

People swapping cask ales for cappuccinos or ordering a burger and a beer via Deliveroo rather than at their local are a new threat to pubs, according to the boss of Greene King.

Nick Mackenzie, who runs the brewer and pub chain with 2,700 sites across the UK, accepts there are other businesses fighting for consumers’ money as a growing share of the population does not drink alcohol.

“They’re taking away leisure time from the pub, yeah. You know, people are choosing to go into coffee shops,” he says. “They are part of that competitor set, as are delivery [apps].”

There are now 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 the pub cannot be beaten as a place for bringing people together.

Speaking to the BBC’s Big Boss Interview podcast, the Greene King CEO is quick to reiterate the special status that pubs hold in the UK, emphasising that “community” is as much of a selling point as the beers, wines and spirits they sell.

But can pubs, inextricably linked to the sale of booze, entice the younger generation to their premises when the around one-third of under-25s and 20% of all Brits don’t drink alcohol?

Mackenzie makes a point of highlighting the no-alcohol beer on draught after nipping into the New Explorer pub, just off Oxford Street, even while pointing out that low- and no-alcohol pints still make up only a small share of overall sales.

“It means that if you don’t drink, you can come to the pub, you can meet friends, you can do the things that everybody does in the pub,” he says.

“My experience – and certainly from my own family – I know young people are still out going to pubs and drinking, but we are also having to adapt to trends around well-being.”

He says the “coffee offer now is credible” across Greene King’s venues as the industry as a whole adapts to an environment where customers come in to have just a coffee or a meal.

“Pubs are creating environments that now are much more comfortable rather than feeling like [being] sat in a dingy pub.

“Not all pubs are like that, I know,” he hastens to add.

And although he isn’t yet committing to on-trend iced matcha or pumpkin-spiced lattes, he says Greene King pubs are selling more hot drinks than ever before.

The industry’s trend away from drinks-led “dingy pubs” toward food-led gastro pubs has been in effect for a while. ONS data suggests the share of pub company staff working in kitchen-focused roles surpassed those behind the bar in 2014 and has increased ever since.

More recently there has been an increase in the number of bars and pubs built around “competitive socialising”, where dates or groups split time between the bar and games like crazy golf, shuffleboard or axe-throwing. That subset of hospitality 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 pubs are now expanding into this area too. If the company is to lean into amusements at more pubs, then Mackenzie’s CV may be an asset.

Before Greene King he ran Merlin Entertainment, owner of Thorpe Park, Madame Tussauds and Legoland, which had a certain appeal to his two children.

“My kids benefited from that when they were younger — they had theme parks to go to. And when they hit 18, I got back into pubs, so they were quite happy about that too,” he chuckles.

Speaking ahead of Chancellor Rachel Reeves’ Budget, Mackenzie says he is hoping for “no surprises” from it as the government looks to raise taxes to plug a multi-billion-pound shortfall in the country’s finances.

Hospitality and retail companies in particular bore the brunt of the chancellor’s decision in last year’s Budget to increase the amount employers pay for National Insurance per employee.

His message to Reeves is: “Give us some breathing space, but actually do the things that you said you were going to do in your manifesto about solving the business rates issue.”

Labour has pledged to reform the business rates system – a tax on commercial premises that can add millions of pounds in costs to companies on UK High Streets.

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

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

“That’s why we’re cutting the cost of licensing, lowering their business rates and helping more hospitality businesses offer pavement drinks and al fresco dining.”

Details on business rates reform are expected before the end of the year.

The BBC is speaking to the bosses of some of the UK’s biggest firms to find out the stories behind the people that lead them.