Pret to close 30 UK stores

Nicola Knight
Senior Analyst - Food-To -Go
@IGDShopperNews

Date : 09 July 2020

Leading UK food-to-go retailer, Pret, has announced that 30 sites will close permanently as part of a restructure to cope with the impact of COVID-19.  The closures represent just over 7% of Pret’s 410-strong estate. Two-thirds of the closures will be outside London, including sites in Glasgow, Reading, Cardiff, Edinburgh, Nottingham and Sheffield.  It will also start a consultation to reduce headcount across remaining UK stores and support staff and will put the lease of its main support office in Victoria, London, up for sale.

COVID impact on sales

Pret has experienced a 74% drop in sales year-on-year because of a “significant impact of covid-19 on operating costs and cash flow”. Last week sales reached £2.7m, compared with £16.5m in normal times.  Pret expects sales to reach no more than 60% of normal levels in the coming months. 

According to an interview with chief executive Pano Christou in The Sunday Times, the effects are even greater in city office locations as workers continue to base themselves at home.  Sales at its site in Paternoster Square, near St Paul’s Cathedral, are down 90%. The branch under the chain’s head office in Victoria had average daily sales of £1,000 last week, vs its usual £6,000. In Manchester and Liverpool, trade is down by 70%, and in Bristol, 60%. 

New business model focusses on the at-home opportunity

Since May, the company has been working with professional services firm Alvarez & Marsal and property agent CWM on cost reductions plans and to examine the best options to “adjust its business model in a new retail environment”. 

With footfall significantly down, Pret is aiming to boost store sales by making its products available to customers at home. Initiatives targeting this market include:

  • Growing sales via delivery apps such as Deliveroo and JustEat
  • Trials of an evening menu from seven stores supported by a new hub kitchen in north west London
  • The new Heat Me At Home range
  • Pret coffee available to order via Amazon

Pret’s focus on reaching customers at home through various digital channels rather than its traditional model of serving office workers appears to be working. According to a report in The Grocer, sales from partnerships with Amazon, Deliveroo, Just Eat, Uber Eats, and its click & collect trial at five London stores rose 408% year on year to represent 8% of total UK sales.

Pret also announced today (9 July) that as part of exploring new ways to reach customers the company will launch Pret Office Drops - a new service aimed at the workplace that offers "fast, free and contactless delivery to a designated pick-up shelf in your office building or workspace".  The service will be available in the UK and US.

Want to know more about the future of UK foodservice post-COVID?

Read our new report Eating In vs Dining Out which explores four scenarios for how the COVID-19 pandemic could impact the UK food and drink industry - in- and out-of-home.