Coffee and sandwich chain Pret A Manger is set to close 30 of its 410 UK stores – jeopardising at least 1,000 jobs – as the company prepares to navigate the post-coronavirus high street. The company has warned that the impact of the pandemic has forced it to make a “difficult decision”.
The eye of the storm
Although Pret has already reopened 399 of its sites across the UK, footfall has not yet recovered to the rates seen at the beginning of the year, and sales are still down 74% on this time in 2019. Along with 30 store closures, the chain is also planning to “reduce headcount across remaining UK shops to reflect lower footfall, rental costs and new safety measures”.
The chain employs around 8,000 staff in the UK, and while the company did not give an estimate for how many employees will be affected by the closures, a source has confirmed that as many as 1,000 could be laid off.
Just two weeks ago, a private letter to landlords by Pret CEO Pano Christou was leaked to the press, revealing that the company could only afford to pay 30% of its quarterly rent dues as it found itself stuck in “the eye of the storm”. Sales were down to a mere 20% of pre-pandemic levels.
“We cannot defy gravity”
Commenting on the company’s sombre Monday morning announcement, Pret’s CEO Christou explained:
“When the coronavirus crisis hit, we said that our priority was to protect our people, our customers, and of course Pret. We confirmed it was our intention to do everything we could to save jobs. Although we were able to do that through the lockdown, thanks in particular to the government’s vital support, we cannot defy gravity and continue with the business model we had before the pandemic”.
While the company remains in talks with landlords to reduce its rent, CEO Christou lamented, “it’s a sad day for the whole Pret family”. He assured, however, that the chain “must make these changes to adapt to the new retail environment”.
“Our goal now is to bring Pret to more people, through different channels and in new ways, enabling us to grow once more in the medium term. While Pret may look and feel different in the short term, one thing I know is that we will come through this crisis and have a bright future if we take the right steps today”.
The future for Pret?
During the pandemic, Pret branched out to by launching a retail coffee initiative with Amazon as well as a delivery partnership with Deliveroo, Just Eat and Uber Eats, with sales through these online channels up 480% year-on-year. They now represent more than 8% of the company’s annual profits.
The chain will likely benefit from levelling up its digital commitments and partnerships with popular food delivery companies, especially as the UK office scene – Pret’s core target audience – shifts permanently towards the work-from-home scheme that proved so successful during lockdown. With less footfall on the streets around London (home to 237 Pret sites), the chain is destined to have to reconsider its current business model.
With that in mind, hopefully Pret can continue its ongoing ethical commitments of offering jobs and housing to the homeless as part of its characteristically compassionate Pret House scheme, and keep up with its daily end of the day deliveries of unsold items to shelters and food banks. It would be a cruel casualty of the pandemic to see one of the UK high street’s most charitable faces forced to change its ways.
Elsewhere on the high street
Privately owned by German conglomerate JAB Holding Company which purchased the chain for £1.5 billion in 2018, Pret is among a slew of popular food chains that have faced financial difficulties due to the UK government’s strict lockdown measures, joining the likes of Frankie & Benny’s, Wagamama, and Bella Italia. After restaurants and pubs in England reopened their doors to customers last Saturday, only time will tell if the service industry can manage a full recovery after a historically challenging quarter.