Pret A Manger will try anything to survive
If you stand outside London’s Bank underground station, in the heart of the financial centre of Britain, and want to pick up a quick lunch, within about 10 minutes you can reach 25 Pret A Manger stores.
Pret, a 37-year-old British sandwich and coffee chain, became ubiquitous in central London with the mantra “Follow the skyscrapers,” serving up London’s harried office workers Posh Cheddar & Pickle baguettes and Classic Super Club sandwiches to eat at their keyboards.
This “is the basis of how we built Pret,” said Pano Christou, chief executive of the chain, which was acquired by food conglomerate JAB two years ago. It stretches to New York and Hong Kong, but its roots still run deep in London, home to more than 300 of its 533 stores worldwide. Over the years Pret (no one uses its full name, French for “ready to eat”) has seeped into Britain’s cultural life with traditions like its Christmas sandwich, part of an annual informal competition among the country’s lunch counters and supermarkets.
But in March, when the coronavirus emptied office buildings, Pret’s customers vanished. Seven months later, they have barely returned. And what was Pret’s greatest advantage — its central London stronghold — has suddenly become its biggest weakness.
The pandemic has turned back the clock on Pret’s accounts by a decade. In August, weekly sales in Britain were about £5.5 million ($10 million), barely more than in August 2010, when it had about 150 fewer stores. It has laid off 2890 people, one-third of its staff. Thousands of those who remain have gone from 35-hour contracts to 28 hours a week.
Pret has become a symbol of the needy city centre struggling without commuters, and its troubles spawned a flurry of newspaper articles about whether people should or shouldn’t “Save Pret,” with the hashtag going wild on the internet. Photos of high-ranking government officials popping in and out of a Pret near Parliament in July sent a clear message about which side of the argument the government was on before it instructed workers to return to their offices, albeit temporarily.
For some companies, the only response to the pandemic has been to hunker down and try to avoid running out of cash before their customers can return (consider the airline industry), but others cannot wait for a return to normalcy because it may never come.
Pret is among the companies forced to reconsider their business as everyone reconsiders personal day-to-day routines. The predicament has forced a successful company to go into survival mode, to figure out what the office lunch is without the office.
And it is now clearly willing to try anything.
It wants to sell Pret food in supermarkets and has already begun selling coffee beans on Amazon; it has signed up to all the major food delivery platforms to take its sandwiches, soups and salads to its work-from-home customers and opened a so-called dark kitchen in North London to prepare its food strictly for delivery, and hopes to open another dark kitchen in either New York or New Jersey soon; and it is devising a special menu of hot evening meals for delivery, such as a Chipotle Chicken Burrito Bowl.
Then there is the coffee subscription, an effort to drive people back to the stores: Five drinks a day made by a barista (coffees, teas and smoothies) for £20 a month. On the face of it, it could be an extraordinarily good deal. With two lattes a week, a subscriber will break even. And the first month is free. (Small print: You can’t order five drinks at once; there must be 30 minutes between each drink order.)
Pret’s whole business model hasn’t collapsed, just one crucial part of it, said Jessica Spungin, who teaches strategy and entrepreneurship at London Business School. Many people are still working, and they still need to eat a quick lunch. “How they can sell it to them is different because these people are no longer where they used to be,” she said.
The only way through this, if there is a way through this, is for Pret to experiment with lots of “small, low-risk” ideas at once, Spungin said.
Christou, 42, sees this as an opportunity for Pret to become a different type of company. Rather than worry about whether workers will return to their offices and what the government’s advice will be, Pret needs to transform.
“I don’t think customers should help Pret. I think it’s down to Pret to figure out what it does and how it evolves,” Christou said at the company’s headquarters last month, on his first anniversary of becoming chief executive.
He joined Pret 20 years ago as an assistant manager, after a stint at McDonald’s. Since then, he has risen up the ranks through operational roles overseeing stores in London, Edinburgh and Leeds. When he took over the helm, he was supposed to be overseeing an expansion. His predecessor had just bought a rival chain to accelerate the growth of the company’s vegetarian and vegan spinoff, Veggie Pret.
Now the goal is survival, and the new mantra, he said, is “Bring Pret to the people.”
Christou said he had gotten the idea for the coffee subscription from Panera Bread, the US chain that is also owned by JAB Holding. (The chief executives of the companies owned by JAB chat and discuss new ideas in a WhatsApp group, he said.)
The other benefit of the subscription plan is the chance to gather more data about its customers, who will scan a QR code each time they use it.
Pret has “been very, very late adapters to this,” Christou said. Panera, he said, has a database of more than 40 million customers across the United States. “Pret’s been run over the last 30 years with gut feel and intuition, and we haven’t done that badly, but I think the richness of data today gives you an opportunity to learn much more about your customers.”
Spungin said that data could prove “invaluable” to Pret in identifying its loyal fans, those who “care enough and miss Pret enough that they’ll sign up.” With that information, she said, the company should consider a food delivery subscription, where people can pick their lunches for the week and have them delivered each morning.
Regardless of what Pret does to diversify its business, “doing nothing was definitely not going to work,” Spungin said. “This has a higher chance of success.”
Christou’s optimism about Pret’s future comes with a dose of realism. “It’s still very much a turbulent time,” he said. “We are not out of the woods.”
Pret, a victim of office downsizing and companies allowing employees to work from home indefinitely, finds it must make the same calculations for its own staff. Christou said its head office would probably stay in London but would be less central, and accommodate about 60 per cent of its newly depleted office staff (90 people were laid off in August).
Christou also hopes a smaller, less grand office will give the company more of a startup culture and recall the earlier, “quirky” days when the company’s founders, Sinclair Beecham and Julian Metcalfe, were constantly experimenting with new sandwich formulas, including a crayfish and rocket sandwich that became a menu staple for years.
“When you’re in survival mode, you’ve got to try things,” Christou said.
The New York Times
Most Viewed in Business
Source: Thanks smh.com