In this late-stage capitalist world, big businesses keep getting bigger and the influence of multi-national corporations makes it increasingly difficult for independent businesses to survive.
More and more sectors of the economy are becoming highly consolidated with a few mega corporations calling the shots for whole industries.
Certain sectors have become so consolidated that five or less major firms make up more than sixty percent of the sector.
When companies consolidate (or merge, as it is more often reported) there are massive consequences all throughout the economy.
The corporation will see myriad benefits such as improvements to its logistics, increased capacity, a larger reach and one less competitor to worry about.
However, while mega-corporations reap the benefits of mergers, it’s the consumers and independent rivals that suffer.
With fewer competitors in the industry, corporations can more freely raise prices and lower the quality of their product as customers struggle for alternatives.
Meanwhile, independents in the sector will have to compete with a larger corporation that can afford to offer lower prices due to bulk purchases, as well as having to operate with a much weaker safety net.
One such industry that is facing this issue is the UK pub sector.
Image credit: JD Wetherspoons
The corporate shift
Over the last two decades, pubs in the United Kingdom have been rapidly bought up by massive pub chains.
Thousands of pubs that were once independent have bought up by a handful of giant chains like Stonegate Pubs, Marston’s and Mitchells & Butlers.
Each of these chains owns well over 1,000 pubs in the UK.
There is also the most well know pub chain in Britain: Wetherspoons.
With almost 1,000 pubs under its name, Wetherspoons exemplifies the best and worst aspects of pub chains.
With the same cheap food and drink available at every location, Wetherspoons will always be a safe and ubiquitous option anywhere in the UK.
However, while most of these pubs have some sort of gimmick with their identity based on the original purpose of the building, they are all ultimately soulless, much like Starbucks and Costa in the café sector.
In the pursuit of corporate synergy and the ‘Wetherspoons feel’, these pubs all ultimately look and feel exactly the same.
Beyond these issues, there is also a lot of concerns about how chain pubs treat their staff, with 0-hour contracts being incredibly prevalent alongside low pay and very high workloads.
The biggest UK chain however is Greene-King, which perfectly illustrates the symbiotic growth of mega chains.
Image credit: Greene-King
All hail the Greene-King
Green-King owns more than 3,000 pubs in the UK, thanks to over two decades of rampant acquisitions.
At the turn of the millennium, Greene-King controlled less than 500 total pubs, but quickly began gathering more and more, with two chains acquired in the year 2000 alone.
In 2004 Greene-King acquired Laurel Pub Company and with it 432 new pubs before acquiring the legendary Belhaven Group in 2005.
In 2007 they acquired 35 restaurants which, along with its acquisition of Belhaven brewery two years prior, massively diversifying the corporations portfolio.
Over the next several years, Greene-King continued to gather more and more pubs until 2015, where it made the biggest pub deal of the decade, acquiring the Spirit Pub company for £774 million, a record in the sector.
This merger added an additional 777 pubs to Greene-King’s empire, as well as more than 450 pub leases.
Up until this point, the corporation had remained British owned. However, this changed in 2019 when Greene-King themselves were acquired by CK Holdings for £2.9 billion.
CK Holding is owned by Li Ka-shing, 96, who has a net worth of $36.4 billion according to Forbes, which makes him the 36th richest man on the planet.
CK Holdings has acquired several other British firms in recent years, including pharmaceutical retail chain Superdrug and telecommunications giant 3 Mobile.
Image credit: CK Holdings
Greene-King had a reported revenue of £2.3 billion in 2023, which follows a trend of rising profits year on year, excluding 2020 and 2021 pandemic losses.
This statistic is striking as it comes during a particularly tumultuous time for the hospitality industry following the pandemic and compounded by the on-going cost of living crisis.
Greene-King’s scale allows them to weather the cost-of-living storm far easier than independent pubs, as they can buy in food and drinks at a fraction of the cost due to the scale it which they are consistently buying.
This is also why Wetherspoons is so infamously cheap.
Greene-King is also a massive employer in the UK with more than 30,000 employees throughout all wings of its business.
However, many of these employees have reported very poor working conditions with zero-hour contracts, low pay, lack of managerial support and very hectic conditions being very frequently reported online.
These employee complaints are prevalent across most major pub chains, with the likes of Wetherspoons being infamous for its zero-hour contracts and low employee satisfaction.
Massive chains like Greene-King promise to further grow in the coming years, which will have massive consequences for our towns and cities that may see independent local pubs become a thing of the past.
Image credit: UCAS.com
The changing face of Stirling’s pubs
Looking to Stirling perfectly illustrates the current state of the pub industry, where it seems that more and more pubs are part of mega chains every day.
At least four of Stirling’s most popular pubs are part of the Greene-King Hive mind with City Walls, The Corn Exchange, Morrisons and Molly Malone’s all being owned by the corporation.
These pubs, on top of the massively popular Wetherspoons, make life incredibly difficult for the remaining independents in Stirling, like Nicky Tams and King Cons.
These pubs are already under immense strain from the cost-of-living crisis, meaning people are going out less while operating costs continue to rise.
While mega chains can operate for less due to bulk buying, independents do not share this luxury.
But what they do have is personality and soul.
These pubs are pillars of the community that live and die by their connection with the people.
As independents do not have to conform to a corporate standard, they are able to be exactly what owners envision and shift gears quickly if something does not work.
They can also operate with a more personal touch that, while seemingly inconsequential, really does make an impact on customer satisfaction and, most importantly, customer retention.
Adding to their status as pillars of community, when looking into the events put on by Stirling’s pubs every week, it is by far independent pubs that host the most live music and entertainment.
Beyond giving the pub a great atmosphere and a strong spirit, this support is massive for local artists who often start out playing in pubs which lets them develop their skills, their confidence and begin to potentially gain a bit of a following.
However, the sad reality is that these pubs are under threat and may not survive much longer.
Support local or lose local
Britain’s economy is not in a good place and people are struggling to pay their bills as prices soar far beyond wages.
But this doesn’t really affect mega-chains, as they can rely on their cheaper operations costs, their own supply lines and a giant corporate safety net.
Independents don’t have this.
Across the hospitality sector small business are being forced to close their doors with pubs, cafes and restaurants all struggling in wake of massive inflation and now recession.
They can survive this but, they need our support.
We need to be able to look past the slightly lower prices offered by mega chains, else we risk loosing our locals forever. If we lose them, our streets are going to lose the soul of our towns and cities, resulting in every high street in the UK having the exact same collection of soulless corporate shells, with nothing setting them apart at all.
If we don’t support local, then we will lose local, and if we lose local there will be nobody left to keep the chains in line.
Featured image credit: Pexels.com
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