Slug & Lettuce owner sells off more than 100 pubs as strife in hospitality sector grows

The sector has suffered from Labour’s move to push up wages and raise National Insurance contributions
One of the biggest players in the British pub industry has sold off chunks of its estate as the sector continues to face an uncertain future.

Stonegate, a pub operator owned by private equity house TDR Capital, sold off 109 pubs in the last year.

Stonegate, which runs around 4,000 pubs, owns the Slug & Lettuce brand, which it bought from Mitchells & Butlers in 2010.

Its financial results reveal it made a loss of £174m for the year to September.

Sales fell by £128m to £1.62bn.

Stonegate said the move is in line with its “estate transformation strategy”, towards pubs it leases out rather than pubs it manages itself.

In the last three months to January, revenues were at £476m, down from £505m compared to the year before.

But losses before tax fell from £37m to £24m, suggesting Stonegate remains a strong player in a sector that has found life tough ever since Covid shutdowns.

The hospitality sector in general has suffered from Labour’s move to push up wages and raise National Insurance contributions.

Last week, Leon founder John Vincent said the government is “totally killing the restaurant industry”.

Pubs are closing at the rate of one a day, says the British Beer and Pub Association, which blames taxes , energy costs and beer duty.

Stonegate’s figures, filed at Companies House, show its debt rose from £3.76bn to £3.81bn.

Some of the proceeds from the sales of the pubs will go to reducing that pile.

The pubs were mostly sold to individual pub landlords.

Stonegate did not rules out further sales, but insists these will be strategic rather than because the pubs are failing.

David McDowall, CEO of Stonegate, said: “2025 was a pivotal year for Stonegate, laying the foundations of our transformation strategy.

A core pillar of this strategy is reshaping our estate to ensure every pub is positioned for long‑term success.

“This focus, supported by a series of targeted initiatives, is proving highly successful.”
Emma McClarkin, CEO of the British Beer and Pub Association, said: “We are the most highly taxed of any business sector with £1 in every £3 spent in the pub going to the taxman.

We know Government values the pub and to continue supporting us they must deliver permanent, meaningful business rates reform, a cut in beer duty and VAT, and review the regulatory burden, so we can remain a cornerstone of the job market, the heart and soul of communities, and a pillar of the economy.”
Pubs are hoping for a lift from the summer World Cup but they will need England to do well to ensure public excitement across the tournament.

The government said it will allow pubs to stay open late to cover the games, some of which kick-off at 11pm or even later.

Other brands in Stonegate’s portfolio are Be At One and The Living Room.

It also owns Bar Soho in the West End and Bonds in Mayfair.

TDR is the private equity house that owns Asda.

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