C S P December 2011 103

There’s a case study happening

before your eyes. It’s how a for-

eign company built upon a very

different consumer culture is adapting to

and growing in the U.S. It’s a story of Plan

B’s, of bullishness and wound licking,

revisions and measured growth. And it’s

not over yet.

It’s the story of Pret A Manger, the

U.K.-based grab-and-go food chain that’s

even more ubiquitous in London than

Starbucks is in any U.S. city.

For more than a decade, Pret A Manger

has been trying to get a foothold on Amer-

ican soil, at one point even summoning the

help of none other than McDonald’s. But

when it first docked in Manhattan in 2000,

Pret met a consumer base uncomfortable

with premade, prepackaged sandwiches

and salads, preferring the city’s traditional

delis and American burger chains. It lost

sales and closed stores.

Today, Pret operates nearly 30 loca-

tions in New York and three in Wash-

ington, D.C. It broke into the Chicago

market in 2010 with two stores, and it has

partnered with mass retailer Target for a

new downtown project in the Windy City.

Things are finally looking up for Pret’s

U.S. growth. As this case study continues,

two questions linger: What is the growth

trajectory for a concept based solely on

densely populated, white-collar locations,

and what does Pret’s presence mean for

how other retailers sell their sandwiches?

Bumpy GrowthHip, industrial design, an emphasis on

natural ingredients (Fair Trade coffee,

Certified Humane chicken), a social-

welfare slant (leftovers donated to local

food banks), a name that requires an

accent to pronounce: It sounds like we’re

talking about fast-casual phenomenon

Chipotle, not a prepackaged grab-and-

go sandwich chain from Great Britain—

though both were onetime investment

projects of the Golden Arches, so we

may have a theme here.

Pret A Manger came out of the minds

of Sinclair Beecham and Julian Metcalfe,

who met while studying property law at

Polytechnic of Central London. Metcalfe

was working as a surveyor when he got

fed up with the “soggy sandwiches and

mush” available from local sandwich

shops, he told British paper The Indepen-

The British Are ComingPret A Manger tries to translate U.K. success to the American marketplace

By Abbie Westra || awestra@cspnet.com

[competitive watch]

26 stores,New York

2 stores,Chicago

3 stores,Washington, D.C.

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C S P December 2011104

dent back in 2008. They opened the first

shop in 1986 in the Victoria neighbor-

hood of London, with the pair buying

ingredients in local markets and prepping

food themselves. It took three years for

the second store to open. By then, the

concept was ready for takeoff.

Aside from the usual struggles of a

start-up, Pret was in the right place at the

right time. British retailers Marks & Spen-

cer and Tesco had been peddling premade

sandwiches to busy London business-

people for some time, and Europeans in

general were already more acquainted with

purchasing ready-to-eat foods than their

American brethren were. Pret’s healthy,

natural slant was also a la mode for urban

professionals of the 1990s.

“Pret came around and elevated sig-

nificantly the quality of those sandwiches

but was basically selling a very known

commodity. And, of course, they were

able to do this in very dense urban mar-

kets,” says Neil Stern, senior partner for

Chicago-based research consulting firm

McMillanDoolittle LLP.

By 2001, Pret was growing nicely,

with about 100 stores in Britain and one

shop in New York, when the company

made a surprising move: It sold 33% of

its share to McDonald’s for an estimated

$43 million. Reaction to the deal among

Pret staff was initially negative—a chain

that hung its hat on natural, high-quality,

humanely raised ingredients, pairing with

McDonalds?! But it made sense. Ameri-

cans ate burgers and fries, not packaged

sandwiches. Pret needed the strength and

leverage of the American giant to under-

stand and enter the market.

And yet, the rest of the decade was

a bumpy one. The McDonald’s invest-

ment forced Metcalfe and Beecham to

expand aggressively stateside without

considering the American consumer

and the fact that they won’t eat packaged

crawfish and avocado sandwiches and

prefer drip coffee to lattes. Under the

perplexed stare of American consumers,

Pret’s sales slid, and doors were closed.

(In 2008, McDonald’s sold its stake, and

private investment firm Bridgepoint

Capital became majority owner.)

Instead of giving up on the U.S. market,

Pret reformulated its menu, adding more

soups, hot sandwiches, drip coffee and the

Slim Pret (half-sandwiches) to encourage

mixing and matching—as Americans are

wont to do. It also emphasized the fresh-

ness of its food in an attempt to overcome

the grab-and-go stigma.

In 2004, Pret’s U.S. store count was

seven. A year later, it was 10. Then 12, 14, 19,

24 and—at the end of last year—31 stores.

“It’s definitely a brand to watch;

it’s gaining momentum,” says Darren

Tristano, executive vice president of res-

taurant research firm Technomic, Chicago.

“When they brought it into New York

the first time around, people didn’t get it,”

says Stern of McMillanDoolittle. “Now,

the second time around, they’re doing

a much better job of communication of

the proposition, that these sandwiches are

made on site, they are made fresh, they

are high-quality ingredients.”

Bespoke or Pret?Today, Pret has begun to find its rhythm

in the United States while still humming

along in Britain.

As of August 2011, sales in U.S. stores

had increased 40% from the same period

last year. Pret’s total profits rose about

37%, to £46 million (about $75 mil-

lion) in 2010, and plans are in motion to

expand further in the United States and

even enter the Paris market, according to

a recent New York Times report.

To Stern, Chicago and Washington,

D.C., are much more of a litmus test of

the scalability of the Pret concept, and so

far things are looking good.

“There’s dense, and then there’s Lon-

don. There’s dense, and then there’s New

York,” he says. “The magnitude is still

very different. What even a market like

Chicago is compared to central London

or midtown Manhattan is still a very

Food-Prep Decision MakingPret A Manger has changed a lot to better appeal to the U.S. market, but there

are a few things it will not do—most of which fly in the face of U.S. grab-and-go

philosophies. Here’s Pret’s take on a few operational decisions c-store retailers may

be facing as well, from Pret USA president Martin Bates.

▶ Made-to-Order or Grab-and-Go? “Our concept has always been based

on fresh and natural ingredients, but also ultimate convenience for busy, working

individuals who don’t want to sacrifice taste and quality. These are factors we feel

are distinguishable to the Pret brand. It’s good food sold fast, and we feel that

experience can’t be replicated with made-to-order.”

▶ Commissary or On-Site? “A commissary would change our business model

fundamentally. Having sandwiches shipped in would mean if we ran out, we

couldn’t make any more. The team that serves you at lunch are the same people

who were making your sandwich only an hour or so earlier. A commissary limits the

flexibility of the business, and the staff loses a connection with what they sell. The

engagement between our products, our people and our customer is critical to Pret.”

▶ Food Prep in Front or Back of House? “We have played around with open

kitchens in the past and might do so again in the future, but for now we keep the

doors to our kitchen closed to maintain the fresh, clean, ordered feel of our stores.”

C S P December 2011106

different kind of thing.”

One thing the company won’t change

for the American market is its “pret a

manger” style. The name, which trans-

lates to “ready to eat,” comes from the

French fashion term “pret a porter,” or

ready to wear. Pret a porter is the oppo-

site of “bespoke” clothing, in which the

clothing article is specifically tailored to

the customer’s specifications. The term

is now used beyond clothing to mean

anything made to order—even sand-

wiches. So, if this were an SAT exam, Pret

a Manger is to pret a porter as Subway is

to bespoke: premade vs. made to order.

In an interview with CSP in January,

Pret A Manger USA president Martin

Bates said the company will never go

bespoke. “Our concept has always been

based on fresh and natural ingredients,

but also ultimate convenience for busy,

working individuals who don’t want to

sacrifice taste and quality,” he said. “These

are factors we feel are distinguishable to

the Pret brand. It’s good food sold fast,

and we feel that experience can’t be repli-

cated with made-to-order.”

So while Pret’s growth continues, the

challenge of convincing Americans that

premade can also mean “fresh” will likely

keep that growth slow—a challenge not

foreign to c-stores. “We have 20,000 Sub-

ways who say fresh means ‘I go there and

they make it in front of me,’ ” says Stern.

“It takes time, clearly, and you begin

in places that are going to be most recep-

tive to it,” he continues, “which is an

extremely time-starved location, places

that put a premium on the ability to get a

sandwich in 30 seconds vs. two minutes,

[where] there’s value to it. And then over

time, when people try it and understand

that it’s fresh and high-quality, you can

start to change perceptions.”

Food prep at Pret works like this: Each

store has its own kitchen. Deliveries arrive

nightly, and a team of cooks starts prep-

ping food first thing in the morning. There

are no sell-by dates: All leftover food is sent

to a local food bank at the end of the day.

Stores are decorated with oversized

photography of food posed in playful

shapes. When they run out of sandwiches,

a curtain—with a cute saying about the

chefs being busy at work making more—

is pulled down over the display.

One freshness cue many U.S. retail-

ers believe to be sacrosanct is preparing

the sandwich in front of the customer.

That’s another thing Pret won’t do. “We

have played around with open kitchens

in the past and might do so again in the

future, but for now we keep the doors to

our kitchen closed to maintain the fresh,

clean, ordered feel of our stores,” Bates

said in January.

Another method Pret won’t be trying

any time soon: commissaries. “A com-

missary,” Bates said, “would change our

Eat Here: Playful, ingredient-centric art and packaging with an emphasis on design and branding help Pret send a message of quality and freshness.

C S P December 2011108

business model fundamentally. Having

sandwiches shipped in would mean if we

ran out, we couldn’t make any more. The

team that serves you at lunch are the same

people who were making your sandwich

only an hour or so earlier.

“A commissary limits the flexibility of

the business and the staff loses a connec-

tion with what they sell. The engagement

between our products, our people and

our customer is critical to Pret.”

Engaged and EmpoweredPret also delivers on its branding through

its employees and the training they

undergo—which also helps the chain

maintain a 60% turnover rate. Compare

that to the fast-food industry’s normal

turnover rate of 300% to 400%. A few

unique strategies ensure the right people

are hired in the first place, while keeping

existing employees engaged, empowered

and even a little competitive. A recent

New York Times business report sketched

out such strategies:

▶ Employees applying for a position

must spend a day working, for pay, in a

store. Fellow workers then vote on whether

or not they should be hired. Ninety per-

cent of prospects get hired; the rest are

sent home with 35 quid and a handshake.

▶ Every manager must spend four

days per year on the floor.

▶ The typical Pret has five to seven

cashiers, with the goal of having no trans-

action take longer than 60 seconds—even

if the shopper orders an espresso drink.

▶ Bonuses are awarded based on the

performance of an entire team, not just

individuals.

▶ Mystery shoppers visit stores

weekly. If a store receives an “outstand-

ing” review, all employees receive

bonuses—emphasizing the importance

of everyone pulling their weight.

▶ When employees are promoted or

pass training milestones, they receive £50

(about $80) or more in “shooting star”

vouchers, which the employee doesn’t

keep, but rather must give out to col-

leagues who have helped them out along

the way.

▶ Every quarter, the top 10% of

stores, as ranked by the mystery-shop

scores, receive about £30 (about $48) per

employee for a party.

Pret is equally meticulous about

its food prep and R&D. In his recently

released book “Demand: Creating

What People Love Before They Know

“A commissary would change our business model fundamentally.”

C S P December 2011110

They Want It,” author Adrian Slywotzky

describes how the company constantly

reinvents its offerings, even popular ones.

Its pickle recipe has changed 15 times, the

chocolate brownie 36. Pret’s carrot cake

has undergone 50 tweaks.

“That’s the difference between medio-

cre and great, and it’s extremely elusive,

and some of our sandwiches are bloody

great—they really work. It takes years of

relationships with the suppliers to get the

right cheese, to get the right seasoning

mix in the mayo,” Metcalfe, now acting as

creative director, told Slywotzky.

Damn YankeesSo from whom is Pret stealing sales?

In New York, it’s likely neighborhood

delis. In Chicago, it’s fast-casual chains

such as Potbelly and Corner Bakery as

well as 7-Eleven, which has a strong

footprint in the Loop business district.

Drug chains such as Walgreen’s, Duane

Reade and CVS may also find themselves

competing with Pret A Manger as they

ramp up their own grab-and-go options.

As for Pret, it’s likely to stick to its cur-

rent focus of densely populated locations

with small footprints and low overhead.

Technomic’s Tristano foresees those other

urban sandwich chains, such as Corner

Bakery and Au Bon Pain, enhancing

their grab-and-go offering but sticking

to their well-tested argument that fresh

still means made-to-order.

Nonetheless, in the greater fast-casual

sandwich segment, Pret won’t likely

touch the front-runner, suburban-centric

Panera, for some time. “I just don’t think

you will see these restaurants in a subur-

ban setting,” Tristano says. “I’m not sure

that they’re going to be as appealing as

a Chipotle or Panera, and certainly not

in more rural setting, and I don’t think

they’re designed for malls.”

But that’s not to say they’ll be stuck

in the city for good. Stern points to Star-

bucks, which, upon its launch, was con-

sidered a strictly urban concept: “Maybe

there’s an adaptation to the model that

says we can make this work in suburbs.”

Like it or not, the blame for the uphill

battle Pret has faced selling grab-and-go

sandwiches is largely lobbed at c-stores,

where endless shelf life and outdated pack-

aging detracted the typical Pret shopper

for years. Perhaps Pret’s growth in the U.S.

market will actually help the acceptance

rate of c-stores’ premade, grab-and-go

foods—until they become a competitor. n