UK food-to-go and coffee chain cites rising VAT, staff costs, and inflation as the main factors behind its decision to increase the cost of its monthly coffee subscription from £20 to £25
Pret says its beverage subscription is used more than one million times a week in the UK | Photo credit: Jaime Rodriguez
Pret A Manger is increasing the cost of its beverage subscription, which gives customers up to five barista-made drinks per day over a month, from £20 ($27) to £25 ($34). Existing subscribers will see their plan increase in March, whereas new customers will encounter the higher rate immediately.
In an email circulated to customers, Pret said that of the £5 additional charge, around £2 would cover VAT, £1.50 would be used to pay staff and £1.50 would offset inflation.
"Since we launched the Pret coffee subscription in 2020, prices for ingredients such as coffee beans and milk have gone up, VAT is increasing to 20%, and we've invested in additional pay for Pret Team members,” a Pret spokesperson told reporters.
Like hospitality businesses across the UK
, Pret is facing the combined challenges of the
reinstatement of VAT to 20% in April 2022, higher ingredients costs and supply chain disruption.
The cost of living is also rising rapidly in the UK, with annual inflation hitting 5.4% in January 2022 –the highest rate since 1 March 1992.
Pret will also need to foot the bill for rising staff costs after announcing that more than 6,900 of its workers would receive at least £10 ($14) per hour, its second pay rise in four months. A planned rise in National Insurance scheduled for April 2022 will also increase wages costs.
First launched in September 2020
to counter Covid-19 disruption to its office worker customer base, Pret says its subscription service is used more than one million times per week in the UK.
The price of Pret’s coffee subscription in the US, which was launched
shortly after the UK debut, appears to be unchanged, with the ‘classic’ and ‘premium’ tiers priced at $19.99 (£15) and $29.99 (£22) respectively.
Pret A Manger operates 411 stores in the UK, where it employs around 8,500 staff. It also operates a further 140 locations across the USA, France, Dubai and Hong Kong. In 2018 the chain was acquired by Luxembourg-based conglomerate, JAB Holdings, for around $1.5bn.