One of the keys to running a successful business is managing the balance between keeping a consistency in what you do well with the need to be constantly innovating to stay ahead of the competition. The difference between businesses who do it well and those who don’t is that you’ve probably already forgotten the names of the latter while the former are still thriving, like Pret A Manger, which has just posted its twelfth consecutive year of financial growth.
Its sales have risen 15% to £776.2m, while earnings rose 11% to £93.2m, while 50 new Pret A Manger shops opened around the world – including locations like the US, France, China and Dubai. It’s a long way from its humble beginnings in the early 80s, so how is Pret managing to keep on growing through recessions, international uncertainty and ever-changing tastes and lifestyles? Find out as we shine our spotlight on Pret a Manger this month…
The Humble Beginnings
Pret may now be an international brand that continues to do better and better each year, but it had an inauspicious start, opening in 1984 in Hampstead, opposite an Underground station, selling freshly-made sandwiches to London commuters. This first Pret lasted only 18 months before going into liquidation and that seemed like the end of it; just another short-lived independent sandwich shop that failed to find a clientele.
However, the brand was bought by Julian Metcalfe and Sinclair Beecham, who made a new start in 1986 on Victoria Street in London. Much of what we today know as Pret was introduced by Metcalfe and Beecham, and they succeeded where the previous bosses had failed. They also helped establish a work culture around ‘Pret Behaviours’ which identifies how all employees should behave, and has been at the heart of the company’s growth over the last three decades.
It runs a Pret Academy in London, where staff are trained in how to serve customers, but also how to exude the happy, relaxed atmosphere that the company demands. Experienced staff also have to attend courses and psychometric testing sessions, and there have been controversies around how authentic Pret’s atmosphere really is, but there’s no doubt that it seems to work in terms of keeping customers satisfied.
It’s also a part of how Pret is determined to represent itself to customers, through its staff’s behaviour but also in terms of ethics, with all unsold food (3m food items a year) at the end of each day collected by charities rather than thrown in the bin. In 2016, 1.7m cups of coffee were given away by staff as ‘random acts of kindness’. Along with making a point about the freshness of its ingredients, Pret wants to make its customers feel good about buying their food and drink from there.
“Pret is spreading in two different ways,” CEO Clive Schlee told Fortune. “It is spreading in day part and also across the menu away from bread-based products.” For a company founded in selling bread-based products at lunchtime, this has been a big development for Pret, which has worked hard on improving its performance at breakfast times and into the evening too, and now claims to have 59% of its business taking place outside of lunchtime.
The most popular product of the year in the UK, US, France and China was croissants, which says a lot about the move away from reliance on the lunch crowd. In 2015, Pret launched its Good Evenings scheme, offering evening meals with wine and jazz music; still aimed at people without the time for a lengthy meal, but with a more refined ambience to fit the expectations of people wanting food before seeing a West End show.
Adapting to customer needs and requirements has helped Pret stay competitive, with 2016 seeing a hugely successful launch for coconut milk as an alternative to dairy. One in five of its popular porridge pots sold last year was with dairy free milk, while two Veggie Pret stores opened in London – the second last month – to cater to meat-free consumers. Vegetarian food is also being pushed in Hong Kong, resulting in record sales, while a new range is set to come out in the US shortly.
If there are clouds on the horizon for Pret, it’s around Brexit, which is expected to hit hard in terms of its workforce. “Traditionally at Pret we just had our recruitment centre and everybody just came to us,” said Schlee. “Now we are preparing for the future by reaching out ourselves.” This has already seen a PR stumble when Pret advertised for 500 unpaid work experience placements, which caused such a stir that it had to rollback on the plans and commit to pay its usual hourly starting rate.
Only time will tell whether Pret can maintain its growth in the market while also struggling to recruit at the rate it is used to, but the last few years have shown that it has plenty of popular ideas and an almost unique ability to diversify its offering without diluting its brand.