Coffee and food on-the-go chain announces permanent closure of 30 UK stores by the end of 2020, putting around 330 jobs at risk, as Covid-19 causes major shift in worker routines
A Pret A Manger store in London, UK | Credit: Marshall Segal
The announcement comes as the coffee and food-to-go chain grapples with profound market challenges caused by the Covid-19 pandemic. Despite having re-opened 339 of its 410 UK stores for takeaway and delivery, Pret said sales were 74% down compared to the same period last year.
In an interview with the Financial Times
, CEO Pano Christou said more than 1,000 jobs could be lost as part of a wider company restructuring, which includes reducing store staff numbers, in the wake of severe Covid-19 disruption.
“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 grown once more in the medium term,” said Christou.
Pret’s business model relies heavily on office worker and commuter trade during busy morning and lunchtime periods. With a large proportion of these customers now furloughed or working from home, and footfall at major travel hubs at a fraction of pre-pandemic levels, Pret has struggled to adapt to new consumer routines during the pandemic.
Like many hospitality businesses impacted by Covid-19, Pret has sought to harness e-commerce to boost sales, launching a retail coffee offering with Amazon and adding delivery options through third-party services such as Deliveroo, Just Eat and Uber Eats. However, these measures appear to have been insufficient to prevent the scaling back of operations.
In April 2020, the JAB Holdings-controlled firm was reportedly in talks to secure €100m
(£87.4m) emergency funding. In June, Pret said it would only be able to pay around 30% of its UK store rents for the next quarter and reported it had spent around £20m during that month alone to stay afloat.
The pandemic’s wider impact on commuter footfall was highlighted in early July when travel concession operator SSP Group announced it would cut 5,000 UK jobs
after Covid-19 caused 85% reduction in railway hub footfall.
The shift in UK working routines and changing consumer attitudes to the way businesses operate was also recorded by a major Allegra report in April 2020. The survey of more than 4,000 people
found 86% believed the pandemic would fundamentally alter the way companies operate in the future. 45% had decreased spending on eating out, 44% of respondents found video calling a good substitute for meeting work colleagues face-to-face while nearly one-fifth had increased use of takeaway delivery services.
Pret A Manger operates around 550 stores across 10 markets globally, employing 13,000 staff worldwide and 8,000 in the UK. In May 2018, German conglomerate JAB Holdings acquired a majority stake
in the company from private equity firm Bridgepoint in a deal reportedly worth £1.5bn ($1.9bn).