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MD Clare Clough on how Pret A Manger is transforming to survive

19 November 2020 by
MD Clare Clough on how Pret A Manger is transforming to survive

The UK managing director of sandwich chain Pret A Manger has been forced to change its London-centric model into something suitable for a post-pandemic audience. Sophie Witts talk to her about coffee subscriptions, dark kitchens and a new dinner delivery service.

When lockdown began in March it put an end to the typical commute. How did Pret adapt to losing its traditional customers?

While Covid was an immediate shock to the system, it was also an indicator of the inherent weaknesses we had in our operating model, which was so reliant on physical shop sales. Closing all our stores in March meant we had taken out most of the revenue opportunity in the UK. We realised that we needed to take Pret to more people, whereas in the past we've been reliant on people coming into Pret.

Quite quickly after lockdown we launched retail coffee products on Amazon, which were the first grocery lines we've ever sold. Pret's always been more of a food-led business, but we actually saw throughout lockdown how much customers missed our coffee. That performed really well. Now we are launching bags of ground and whole-bean coffee in 280 Waitrose stores and on Ocado in November. We're quite far into conversations with other grocers, too.

Do you think other Pret retail products could work in supermarkets?

We're exploring that at an ingredient level, looking at products like granola and some sauces and dressings from Pret products, and seeing how we could make those available to people at home. It's a really exciting channel.

In September Pret launched an in-shop coffee subscription service that offers five drinks a day for £20 a month. How is that performing?

That was sparked by the Instagram posts we were seeing when we opened the first 10 shops, of people holding their Pret cups aloft. We wanted to welcome people back and do something celebratory, but we didn't anticipate how successful the subscription would be. We had 20,000 people emailing us on the first day, which exceeded our expectations, and we can see through the figures that people really are using the service and getting the value out of it.

During lockdown, any customers who have signed up have been offered the chance to pause their subscription.

Does anyone take you up on the maximum offer of five coffees a day?

Yes, but I'm happy to say that the average rate is a couple lower than that. The subscription covers all major drinks, so you can have coffee in the morning, a smoothie at lunch and a hot chocolate in the afternoon. There are ways to get to five drinks without pure caffeine intake, but we do have some subscribers who I would describe as incredibly loyal.

We do have some subscribers who I would describe as incredibly loyal

Are you getting a lot of customer data from the subscription?

Yes, this is our first foray into a digital relationship with our customers. We can start to see where people are buying food and where they're not, and find opportunities to give people something new. For example, croissants are really popular in the mornings, but not in the afternoon, so perhaps we need to offer some sweet treats that are more suitable for that time of day. Through the subscription we're also seeing a higher number of younger customers and it's been quite popular in areas near colleges and universities. It's generating a lot of different thinking within the business about how we need to adapt. It's all about staying relevant at this point.

Very Berry croissant
Very Berry croissant

Leon also launched a coffee subscription this year – do you think the model will become more common in the hospitality sector?

Subscriptions are part of our consumer lifestyle, but no one in the UK was really doing it in the out-of-home food and drink market. Our sister business in North America, Panera Bread, has a subscription, so we had learnings from that. There is something habitual about coffee. I wasn't surprised that other people came out with similar models; I think it's interesting to see how it plays out for the sector.

Pret has been trialling an evening delivery dinner menu in a few shops over the summer. How is that going?

We're just about to extend it to more locations and change the menu. The first trial offered products already in our range, but we've been working with delivery partners to share insights into the types of food that are popular and when. We're launching a chicken and rice hot burrito bowl, and a Pret take on a popular takeaway item that begins with a ‘P'. I can't say more than that.

It's been a challenge, as the shops that are open for delivery operate a bit like dark kitchens in the evening. We've had to look at putting in new equipment as we're not used to producing these types of food. That menu will go into broader testing and should roll out early next year. Hopefully, we can have three established day parts as part of the Pret core menu. Breakfast and lunch are already successful on delivery, but dinner is the biggest opportunity.

How else is Pret planning to grow?

We opened a dark kitchen in Colindale in London over the summer that offers delivery but has no physical shop attached. Dark kitchens are part of our plan in terms of how we increase our breadth and reach. We've also partnered with Moto motorway service stations and will hopefully open our first site with them in December. There are two shops on plan and we expect to launch further sites around the UK.

Does Pret still have a future on the high street?

We will always exist in city centres. The recovery plateaued as the Tier 2 restrictions came in, but we were seeing good build-back. I hope that will continue into next year and get those shops back to strength. I think we'll then look to complement that estate with more suburban sites. Those shops have performed well with people working from home, and that balance will likely continue in a post-Covid world. If we want to offer dinner menus, kitchens will need to be in locations where people are in the evening.

Chicken caesar and bacon baguette
Chicken caesar and bacon baguette

There were several articles written earlier this year that seemed to make Pret synonymous with the ‘back to work' message. How did you respond to that?

We were never behind any drive to encourage people back to the office or challenge any guidance. Although there were many articles written using our name, we weren't part of that; we were already planning to move away from the dominance of the London worker.

Sometimes you have to let people say what they might, but it certainly wasn't our position. Pret's founder, Julian Metcalfe, was recently in the press for making some comments [about opposing a second lockdown], but it's completely the reverse of what we think. People should be taking the precautions necessary to put the health of the nation first.

Pret A Manger St Martins Lane
Pret A Manger St Martins Lane

Pret has undergone a major restructure this year, with more than 30 sites set to close and the loss of more than 2,800 jobs. Is there enough government support to ensure the business is secure for the future?

Unfortunately, we had a restructuring process that was made public over the summer, with some job losses as a result. We did take part in the Job Retention Scheme [JRS] and were grateful for that as it affected the number of jobs we were able to save. The restructure broadly right-sized us to where we need to be, but there are some locations, like airports, where the shops are going to be closed for a bit longer, and therefore something like the ongoing JRS could still be beneficial.

Is it difficult to plan for the future when the restrictions are changing so regularly?

We're really clear on our transformation programme and that stays, regardless of the changing restrictions across the country. It's a good focal point for the business.

What will the Pret of the future look like?

I see us as a multichannel business with a strong core. I think physical shops will come back as the strongest part of the company, but those might be in more suburban locations, or with more of a national reach than the central London dominance of the past. I hope we'll have a strong grocery brand in retail and much more of a delivery presence, and we're working on click and collect and order ahead.

Pret has always been an entrepreneurial business and we're rediscovering that at the moment, so I hope that spirit stays with us for the long term.

CV

Aug 2019-present UK managing director, Pret A Manger

Jan 2019-Jan 2020 Chief food and coffee officer, Pret

Jun 2013-Jan 2019 Food director, Pret

Oct 2010-Jun 2013 Head of food and technical, Pret

2004-2010 Category technical manager, Tesco

2002-2004 Graduate Scheme, Safeway Stores

1998-2002 BSc in food technology, University of Reading

About Pret A Manger

1986 Founded by Julian Metcalfe and Sinclair Beecham in London

2018 Sold by private equity firm Bridgepoint to Germany's JAB Holdings, which also owns Panera Bread and Krispy Kreme, for £1.5b

March 2020 All 410 UK Pret stores close during the national lockdown. The first stores begin to reopen in April

August 2020 Pret announces that 30 sites will permanently close by the end of the year, with the loss of 2,800 store jobs and 90 support centre staff

September 2020 Launch of YourPret Barista coffee subscription service

October 2020 A further six shops earmarked to close, with 400 jobs at risk

Pret operates 389 shops in the UK, including 266 in London, and a further 156 in nine international markets. It employs around 9,000 people worldwide, including 6,500 in the UK

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