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Pret A Manger Will Do Anything to Survive

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Pret A Manger Will Do Anything to Survive

The pandemic caused the biggest strength of the lunch chain —  Pret a manager hundreds upon hundreds of central London stores — to become its greatest weakness.

LONDON — You can find 25 Pret A Manger shops within 10 minutes of standing outside Bank Underground Station, which is located in the heart of London’s financial center.

Pret, a British sandwich and coffee chain that was founded 37 years ago, is now a household name in central London. It serves up classic Super Club sandwiches and Posh Cheddar & Pickle baguettes to office workers who are too busy to eat at their keyboards.

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Pano Christou (chief executive) of the chain said that this “is the foundation of how we built Pret”. The chain was bought by JAB, a food conglomerate, two years ago. Although it has expanded to New York City and Hong Kong, its roots are still deep in London, where more than 300 of the 533 stores it operates worldwide. Pret, French for “ready-to-eat” and not its full name, has infused itself into Britain’s cultural life through traditions such as its Christmas sandwich. This is part of an informal competition between supermarkets and lunch counters in the country.

Pret’s customers disappeared in March when the coronavirus destroyed office buildings. They have not returned seven months later.

 Pret’s greatest asset, its stronghold in central London, has now become its biggest flaw.

Pret’s accounts have been rewritten by the pandemic, which has pushed back Pret’s account numbers by a decade. The weekly sales in Britain in August were just 5.5 million pounds ($7.1million) less than in August 2010. This is a significant decrease from August 2010, when the company had 150 fewer stores. It laid off 28890 employees, which is a third of its workforce. The remaining employees were given 28-hour work weeks and 35-hour contracts. The chain announced that 400 more jobs would be lost and that six additional stores in Britain would close two months later.

Pret has become a symbol for a poor city center that is struggling to find commuters. Newspaper articles have been flooded with questions about Pret’s status. Photos of government officials visiting a Pret near Parliament in the summer sent a clear message about the side the government was on before instructing workers to return temporarily to their offices.

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Some companies have found that the only way to deal with the pandemic is to stay calm and avoid running out cash before customers return. (Take the example of the airline industry). Others cannot wait for normalcy to return because it might never happen. Pret is one of the many companies that have had to rethink their business. This comes as everyone reevaluates their daily routines. A company that has been successful must now go into survival mode to find out what office lunch looks like without the office.

It is willing to do anything.

It plans to sell Pret food at supermarkets and has started selling coffee beans on Amazon.

A coffee subscription is another option, which aims to get people back into the shops. It offers five drinks per day, made by a barista (coffees teas, and smoothies), for PS20 per month. It could seem like a great deal. A subscriber can make even money with two cups of coffee per week. The first month is completely free. (Small print) You cannot order more than five drinks at once. Each order must wait 30 minutes.

Pret’s entire business model has not collapsed. Jessica Spungin, London Business School’s strategy and entrepreneurship professor, stated that Pret’s only one key part of the business model is still viable. Many people still work and need to have a quick lunch. She said that people have changed and are unable to sell the product to them.

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Pret should experiment with many “small, low-risk” ideas simultaneously to get around this problem, Ms. Spungin stated.

42-year-old Mr. Christou sees this opportunity for Pret a manager, to be a different kind of company. Pret must transform, not worry about workers returning to work or what the government will advise them.

Pret should not be helped by customers,” he said. “I think it’s up to Pret that it figures out what it does, and how it evolves,” Mr. Christou stated at Pret’s headquarters last month to mark his first anniversary as chief executive.

After a brief stint at McDonald’s, he joined Pret as an assistant manager 20 years ago. He has been promoted to operational positions in London, Edinburgh, and Leeds. He was expected to oversee an expansion when he assumed the helm. To accelerate the growth of Veggie Pret, the company’s vegan and vegetarian spinoff, his predecessor had just purchased a rival chain.

The goal now is survival. His new mantra is to “bring Pret before the people.”

Mr. Christou stated that he got the idea for the subscription to coffee from Panera Bread in the U.S., which is also owned and controlled by JAB Holding. He said that the chief executives of JAB-owned companies chat with each other and share new ideas in a WhatsApp group.

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Another benefit to the subscription plan is the possibility of gathering more data about customers. Customers will scan a QR code every time they use it.

“Pret a manager was very, very late adjusters to this,” Mr. Christou stated. He said that Panera has more than 40,000,000 customers in the United States. “Pret has been managed over the past 30 years using intuition and gut feeling, and we haven’t done that poorly, but I believe the richness and variety of data today allow you to learn more about your customers.”

Ms. Spungin stated that Pret could benefit from the data to identify its loyal customers, who she believes are “invaluable”. She suggested that Pret consider offering a food delivery service where customers can order their meals for the week and then have them delivered every morning.

Pret can diversify its business regardless of what it does, but “doing nothing is definitely not going to work”, Ms. Spungin stated. This has a greater chance of success.

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With a pinch of reality, Mr. Christou’s optimism regarding Pret’s future is mixed with realism. He said, “It’s still very turbulent times.” “We aren’t out of the woods.”

The furlough program by the British government, which will end on Oct. 31, will still pay Pret’s store staff and about three million others in Britain.

Pret’s rent payment is a problem, as it is for many British hospitality businesses, particularly those located in central London. Businesses were able to defer their rent payments by the government, which put in place a moratorium against evictions. This has been twice extended now until the end of this year.

“The extension to the moratorium was huge for us,” said Mr. Christou.

Rent is not just a problem in the 26 stores that have been closed permanently in Britain. Pret also placed the lease for its headquarters in London’s Victoria, close to the original Pret, on sale. It is a vast industrial area of concrete and glass with lots of places for staff to gather.

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Pret, which has been affected by office downsizing, and companies that allow employees to work remotely indefinitely, must now make the same calculations as its staff. According to Mr. Christou, the London head office will likely remain in London. However, it will be less central and would accommodate approximately 60% of the newly-depleted staff. (90 employees were laid off in August).

He also hopes that a smaller and more humble office will foster a startup culture. This will bring back the “quirky” days of the founders Sinclair Beecham & Julian Metcalfe who were always trying new sandwich recipes, such as the crayfish-and-arugula sandwich, which became a staple on the menu for many years.

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