BRAND HEALTH CHECK: Pret A Manger - Will Cafe Culture Plans Revive Pret A Manger?

Marketing, December 11, 2003 | Go to article overview

BRAND HEALTH CHECK: Pret A Manger - Will Cafe Culture Plans Revive Pret A Manger?


Pret A Manger's rapid overseas expansion has been blamed for a pounds 20m loss. Will a scaling back abroad and debut in the cafe market revitalise the chain, asks Ben Bold.

Pret A Manger reinvented the office lunch. The upmarket sandwich chain was launched in 1986 and, according to founders Julian Metcalfe and Sinclair Beecham, was a response to the UK's 'limp and horrible' sandwiches.

But last month the business reported a pounds 20m loss and critics have laid the blame at the feet of an aggressive expansion drive into the Far East and US. As a result of the loss, the company has closed seven of its 22 New York outlets and several in the UK.

Pret's overseas expansion began in 2001 when McDonald's bought one third of the business. The deal was met with some hostility: how could a brand that prides itself on quality ingredients and treating its staff well get into bed with one that has been accused of exploiting staff, serving up second-rate meat and throwing around its litigious weight?

While the British business is still making money, profits halved from pounds 3.6m to pounds 1.8m last year. And Metcalfe, who returned to the helm of the business in March, is nothing if not obsessive about detail.

He admits that the overseas expansion has been 'far too bullish' and voices frustration at the fact that Pret was planning to open in China when it still does not have a presence in Wimbledon, Bromley or Kingston.

Metcalfe also announced that the company will be moving into Starbucks and Costa territory. Last month he said their massive popularity had 'paved the way for us to open 200 or 300 of what we will call Pret Cafes'.

Pret must also guard its core market, which has opened up further to competition. Its closet rival is Subway, which now has 150 outlets, overtaking Pret's 132. That is growth of 112% since 1999 for Subway, compared with 52% for Pret.

Marketing asked Samantha Smith, former McDonald's and Burger King marketing director and senior vice-president of marketing at agency Digitas, and Mark Lund, co-founder of Delaney Lund Knox Warren and head of the Burger King account, for their views on the brand.

VITAL SIGNS
Number of specialist sandwich shops in the UK

                  2003    2001    1999   % chng
Subway             150      53      38      112
Pret A Manger      132     111      80       52
O'Briens           104      62      30       74
Benjys              53      42      30       23
Eat                 25      18       -        -

Source: Mintel

SAMANTHA SMITH

Pret A Manger's response to 'limp' sandwiches in 1986 was a revelation.

Given the market at the time, it was a brave positioning and needed the passion and commitment of the founders to make it happen. Pret made Marks & Spencer's sandwich quality look second-rate. …

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