Pret A Manger Announces Plan to Restructure The Business In Response to COVID-19
Significant impact of COVID-19 on operating costs and cashflow
Sales across UK shops 74% down year on year
Difficult steps to ensure Pret sustains the crisis and emerges fit for future growth:
30 Pret UK shops will no longer reopen
Pret to start consultation to reduce headcount across remaining UK shops to reflect lower footfall, rental costs and new safety measures
Planned reduction of support roles and sale of lease for main support office in London, Victoria
Plans underway to “bring Pret to more people”, including new delivery partnerships, a retail coffee offering, click & collect trials and evening dinner service
Pret CEO, Pano Christou: “It’s a sad day for the whole Pret family, and I’m devastated that we will be losing so many employees. But we 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.”
LONDON, 0830, 6TH JULY 2020: Pret A Manger is today announcing a series of immediate steps to adjust its business model to succeed in the new retail environment.
Following the outbreak of COVID-19, Pret has faced significant operating losses. While the business has reopened over 300 UK shops and established an effective new operating model to protect customers and Team Members, footfall and sales remain down across the UK. Sales across UK shops are 74% down year on year. Pret is also experiencing a much slower recovery in the UK, in comparison to the other countries it trades in.
As a result,30 shops across the UK will be closed permanently in the second half of 2020.
The business has also made the difficult decision to reduce shop teams across its remaining UK shops to reflect the lower levels of demand. Pret’s support teams will also be restructured to ensure that Pret has the right number of people in place to support the business in its new environment.
A consultation will therefore commence with shop teams and impacted Support Centre teams this week. No final decisions will be made until the consultation is complete.
A range of support is planned to provide Pret leavers with a smooth transition to new roles. A Pret Talent Directory has been created to advertise available Pret Support Centre Talent, which will be marketed to over 5,000 HR professionals. Links with retailers who are recruiting have been made through which our shop employees can fast track into new jobs.
Alongside the planned reduction in headcount, Pret will be making a number of additional changes in the second half of 2020. These include starting a sale process for the lease of Pret’s main support office in London, Victoria.
Discussions with landlords across the Pret estate over a more sustainable leasehold model are also on going. Pret has engaged with external consultants, Alvarez & Marsal and CWM, to complete a full estate review and resizing programme, working collaboratively with landlords to ensure the continuation of as many of its UK shops as possible.
Reduced sales have also had an impact on Pret’s main charity, the Pret Foundation. To enable the Foundation to continue its important work fighting poverty and helping the homeless, a major fundraising campaign will be launched during the second half of the year, beginning with a digital raffle to raise funds.
Meanwhile plans are under way to reshape Pret’s business model over the medium term. While much of Pret’s historic growth has been built around office locations and serving office workers, a key focus in future will be about bringing Pret to more people, through different channels and in new ways.
In recent weeks, Pret has launched a retail coffee offering with Amazon, broadened its delivery and digital footprint in partnership with Deliveroo, Just Eat and Uber Eats, and launched Click & Collect trials in five shops in London. Sales across these digital aggregator channels have already grown 480% year on year, and now represent over 8% of total UK sales.
Alongside these changes, Pret will launch a series of further innovations over the coming weeks, including an Evening Delivery menu to be trialled from seven shops and a new hub kitchen in North London.
Commenting on the changes, Pret’s CEO, Pano Christou, said: “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. That is why we have adapted our business and found new ways to reach our customers.
“It’s a sad day for the whole Pret family, and I’m devastated that we will be losing so many employees. These decisions are not a reflection on anyone’s work or commitment. But we must make these changes to succeed in the new retail environment. We will be supporting our leavers to find new positions through a number of initiatives. Our goal now is to bring Pret to more people, through different channels and in new ways so that we can continue to provide great jobs and opportunities to our remaining employees.”
“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.”
Notes to editors: • Pret employs 13,000 Team Members globally, including, 8,000 in the UK • Pret runs around 550 shops across 10 markets. • At the end of May, Pret appointed A&M and CWM to advise on a comprehensive transformation plan for the business, focusing in particular on the cost base of the business, including leasehold pressures in light of the changed market conditions.