During the current cost of living crisis, the largest integrated pub operator and brewer in the United Kingdom has prioritized adapting menus to limit price increases and maintain value for customers.
The chief executive of Greene King has told it is starting to see an easing of some cost pressures and hopes the trend will continue as the hospitality industry gets into motion for the summer.
Nick Mackenzie admitted that energy, food, and labor costs meant the outlook continued to be challenging but there had been some progress in 2023 to date and he anticipated fewer bill burdens lay ahead.
He was speaking to Ian King Live just hours after the company, the largest integrated pub operator and brewer in Britain, reported a significant increase in annual profits.
Greene King, which owns pub restaurant franchises including Chef & Brewer and Hungry Horse, reported an adjusted full-year operating profit of £192.6 million for 2022.
This was an increase from £18.6 million in 2021 when COVID restrictions were in effect for the majority of the year.
In the spring of last year, the company, whose beer brands include Greene King IPA, Old Speckled Hen, and Abbot Ale, reported that sales had returned to pre-pandemic levels.
Despite the impact of the worsening expense of living crisis, which accelerated significantly after Russia invaded Ukraine, this was the case.
The war caused a surge in energy-driven inflation, with companies throughout the supply chain passing on price increases to consumers.
Greene King reported that customer confidence remained “depressed” throughout the year, despite significant events such as the World Cup preceding Christmas boosting business.
It centered on modifying menus to limit price increases and preserve value.
Mr. Mackenzie told Mr. King, “The outlook remains quite bleak.” Costs are still a problem.
The good news is on some levels the consumer has remained positive about coming out to the pub and enjoying a pint or two… (but) the next 9 to 12 months are still going to be quite challenging for us.
“We still have the challenges around energy, we still have labor cost inflation in our business as well and food inflation is still high.
“My hope is during the course of this year it will come down, will start to ease.”
