Major pub chain names such as Be At One, Yates and Slug and Lettuce have been high street mainstays for punters across the UK in recent decades.
Yet while last orders are not being called, many of them could have rival breweries taking over as current owners ponder downsizing plans involving more than 1,000 pub sites sold off.
The Stonegate Group is preparing for the potential sale of many venues in deals worth an estimated £1billion – though they have insisted that did not mean pubs closing if buy-ups by competing firms did go ahead.
The chain, owned by private equity firm TDR capital, completed a takeover of rival Ei Group before the pandemic – only for forced pub closures during that period to hit hard.
Hospitality industry chiefs have also highlighted the extra pressures caused by high inflation, rising energy bills and the Labour government’s increases to the National Insurance contributions which must be paid by employers.
The bars operating under Stonegate Group brands can often be seen packed, especially at weekends – with Slug and Lettuce pubs offering ‘2-4-1’ cocktail deals and ‘bottomless brunches’.
They can be found in town and city centres across the UK, as part of Stonegate’s collection of 4,500 pubs – some 800 of which prompted a furore last year over ‘dynamic pricing’ hikes in the cost customers were charged for pints.
There have been ongoing financial worries for the sector, amid an environment in which hundreds of pubs and nightclubs have been forced to close in recent years.
Slug & Lettuce pubs are familiar sights across UK high streets including this one in Leeds
The firm did previously consider plans to sell 1,000 venues in 2023, amid reports of its £3billion debt piled up during the pandemic.
Many of those were put on hold – but the company last year warned of a ‘material uncertainty’, though a refinancing deal was put in place to last until 2030.
The pub firm is owned by TDR Capital, the private equity firm behind supermarket Asda, and runs more than 4,500 licensed venues.
TDR bought 333 pubs from Mitchells & Butlers in 2010 and the subsequent £3billion merger with Ei in 2019 made Stonegate the UK’s largest pub landlord, overtaking Greene King – only to be burdened by debts becoming worse with Covid shutdowns.
Some 1,034 of the existing 4,500 pubs are now reported to be at the centre of discussions over whether they could be sold as so-called ‘platinum’ properties, worth an estimated total of £1billion.
These premises were previously securitised after the mooted sales that did not go ahead in 2023, helped by a £638million loan from private equity
That securitised the platinum pubs with a £638million loan from private equity business Apollo, hiving them off into a separate entity within Stonegate.
A non-call period on the Apollo loan, preventing Stonegate from dispensing with or refinancing those pubs, is scheduled to expire this coming January.
Company sources say the pubs themselves would remain open, but the January change would permit potential sales or partial sales.
A Stonegate spokesperson told the Daily Mail: ‘We are looking at options for the Platinum portfolio, of circa 1,000 leased and tenanted pubs, which could include a refinancing, partial sale, or full sale of the Platinum sites.
‘But as we explained to our bondholders, no decisions have been made.
‘We are continuing to make good progress on our transformation strategy.’
Stonegate agreed a refinancing deal last year that it says will mean no such further action is necessary until 2030.
Any potential buyers of pub venues put up for grabs after January would be expected to keep them open, the company believes.
The firm has previously faced criticism for introducing surge pricing at some venues.
So-called ‘dynamic pricing’ was rolled out at around 800 Stonegate sites across Britain – making customers pay more for drinks at peak times such as during sports games and on weekends, with increases averaging 20p per pint.
Meanwhile, it was recently revealed more than 2,000 pubs could be forced to close next year without urgent Government intervention to cut business rates and offer pubs some essential relief.
In a stark warning to Chancellor Rachel Reeves, the British Beer and Pub Association said England could lose about six pubs a day, putting at least 12,000 jobs at risk.
Pub landlords say a ‘perfect storm’ of high business rates, alcohol duty and Labour’s tax raids are making it impossible to generate profit in the beleaguered hospitality industry.
Already more than one pub a day is closing its doors for good.
But there are fears this could increase to six per day next year as landlords struggle to recover from increases in National Insurance contributions and minimum wage.
And the industry now fears the threat of revaluations of pubs for business rates and the loss of a 40 per cent discount for hospitality businesses – already reduced from 75 per cent during Covid – in the upcoming Budget.
Last year pubs and bars accounted for 0.4 per cent of total UK turnover yet they paid 2.1 per cent of the business rates bill, the BBPA says.
If the Chancellor does not reform business rates in her next Budget, the BBPA said the UK could lose 2,000 pubs which would be ‘a wrecking ball’ for the economy, livelihoods and communities who rely on them.
The organisation is calling on the Chancellor to apply a reduction of 20p in the pound for pubs.
They say that this could save almost 40 per cent of at-risk pubs – the equivalent of 5,400 jobs – and generate nearly £100million in Gross Value Added (GVA) to the UK economy.
The BBPA research also laid bare the pub closures in every party leader’s local authority.
Ms Reeves’ area of Leeds has suffered significant losses since 2014, losing 56 pubs.
Meanwhile, Sir Keir Starmer’s Holborn and St Pancras local authority, in Camden, has lost almost three per cent of its pubs since 2014 with 7 pubs closing their doors.
But it is Sir Ed Davey, the leader of the Liberal Democrats, whose Kingston-upon-Thames patch has lost the highest proportion of pubs.
Nine there have shut their doors since 2014 (11.4 per cent).
