Pret a Manger’s fall from grace


Little more than a decade ago, Pret a Manger was regarded as such a model of retail perfection that food industry executives named it as the brand they most admired.

It stood out for its “excellent” customer service, they said, and its co-founder Julian Metcalfe was so obsessed with keeping consumers happy that he printed his office phone number on every item Pret sold, so that they could call him directly if they had any complaints.

Metcalfe, an old Harrovian, sold his stake in the chain in 2018 and is long gone. Instead the home of the £6 chicken sandwich is owned by a German firm called JAB Holding Company. Under its ownership Pret has, Metcalfe recently told The Telegraph, “let down” the customers he worked so hard to attract.

A high street hero in the Noughties, Pret has now put customer loyalty at risk with a subscription scheme that sometimes overpromises and underdelivers, and which, it is claimed, has dented the morale of the staff.

Julian Metcalfe (L) and Sinclair Beecham, founders of Pret, pictured in 2000
Julian Metcalfe and Sinclair Beecham, founders of Pret, pictured in 2000

Club Pret, as the membership scheme is called, charges £30 per month, for which customers are entitled to five barista-made drinks per day, as well as a 20 per cent discount on food items.

Launched at the height of the pandemic in September 2020, it was designed to entice home workers away from their laptops and give the company a guaranteed income, rather like a football club selling season tickets.

From day one there were hints that demand might have outstripped expectations. Pret’s chief executive, Pano Christou, expected 2-3,000 people to sign up on the first day, but by 3pm that day the figure was already 16,500.

By April 2023, according to its own figures, the subscription scheme was being used 1.25million times per week.

Some in the industry see echoes of the Hoover free flights fiasco 30 years ago, when the vacuum cleaner firm offered flights to the US worth £600 for every purchase over £100 and had to renege on the offer when engagement far outstripped expectations.

With coffee costing upwards of £3 per cup, the scheme means members could slurp their way through £450 worth of drinks for £30 if they maxed out on the offer. In reality, of course, the viability of the scheme relies on the assumption that no one does, and that members will become so shackled to Pret for their caffeine hits that they will end up buying breakfast, lunch and snacks there every day too.

You don’t need to have the deviousness of a career criminal to work out the obvious flaw in the system: if you are entitled to five drinks per day but only want one or two, why not claim the others for your family, friends or colleagues? Better still, why not split the cost of one membership with other people to get your one or two daily drinks for £15 or £10 a month each?

And that is exactly what happened, until Pret put a stop to it earlier this year by forcing customers to log in to its own app every time they want to claim their allocated drinks or discounts, which prevented people from using screenshots of each others’ QR codes.

Glitches with the updated system, though, have driven some customers to distraction because of difficulties in logging in to the app and loyalty bonuses that mysteriously disappear.

There have been tales of staff switching off machines for making iced coffee – and telling customers they are broken – because they simply can’t make the drinks fast enough to meet demand. Some customers complain that their favourite drinks are never available.

“It has put the members of staff under almost unbelievable pressure,” one former Pret employee says. “They suddenly threw thousands of extra people at the staff without the right equipment to cope with the demand.

“It has been heartbreaking for the staff and for the customers because trust and loyalty between them were always very important. Now the staff are having to deal with a good many people feeling upset.”

Pret has previously admitted that “a few customers may have experienced technical issues in accessing their new codes” and that anyone with problems could “contact our customer support team who will be happy to help”.

They later added: “Since we made this change in March, our team have either given refunds or applied the Club Pret discount as normal to any customers who have genuinely struggled to log in.”

Members of Club Pret have faced technical issues with accessing their code
Members of Club Pret have faced technical issues with accessing their code - Bloomberg

Pret’s founders, Mr Metcalfe and his university friend Sinclair Beecham, spent decades building up the brand and its reputation.

Having bought the name Pret a Manger from a failed independent shop in Hampstead, they opened their own first Pret in 1986, and took three years to open another one.

Food was – and still is – made fresh every day. Metcalfe and Beecham wanted staff to be chosen for their cheery disposition and can-do spirit rather than experience, and allowed employees to give away coffees at random to customers they felt deserved it.

Customers also felt they were part of a social movement because food that wasn’t sold at the end of each day was given away to homeless people and food banks, and people who had been homeless or in prison were given help to join the staff (both practices remain today).

The first big change came in 2001, when 33 per cent of the company was sold to McDonald’s, which led to over-expansion in foreign countries. McDonald’s sold its stake in 2008 to the private equity firm Bridgepoint, which set a target of having a Pret on every street corner in London. That led to complaints from staff that recruitment was rushed and poor quality hires were made.

Nevertheless, in 2010 and 2011, Pret reached that status of most admired brand, according to a survey by research company Allegra. More than 300 food executives were surveyed.

Pret’s darkest moment came in 2016 when teenager Natasha Ednan-Laperouse died after suffering a severe allergic reaction to sesame contained in a Pret baguette.

Nadim and Tanya Ednan-Laperouse hold a picture, alongside their son Alex, of their daughter Natasha, who died from an allergic reaction to a Pret sandwich
Nadim and Tanya Ednan-Laperouse hold a picture, alongside their son Alex, of their daughter Natasha, who died after having an allergic reaction to a Pret sandwich - Jonathan Brady

The coroner at the inquest into her death criticised Pret’s “inadequate” food labelling and said the business had not taken the issue of food allergies seriously enough.

They have since rolled out new labels featuring the full ingredients list including all allergens and also have allergens displayed on shelves.

Since 2018, Pret has been 90 per cent owned by JAB, the Luxembourg-based investment vehicle of the Reimann family of Germany. The takeover was controversial because the grandfather of the current owners, Albert Reimann Jr, and his father Albert Sr, were committed Nazis who used forced labour to grow the business before and during the Second World War. The firm has said they are “ashamed” of this history.

The takeover coincided with a dip in the Allegra ratings for customer service.

Then in 2020 came Covid, which killed off many businesses that relied on the daily spending habits of office workers.

Jeffrey Young, chief executive of Allegra Group, says Club Pret “probably saved the company” during Covid, but is “incredibly generous” and will almost certainly have to be watered down.

He adds: “It almost defies gravity that they could do this and still make money. They are going to need to tone it down at some point. There is no rational reason why they have to offer people five coffees per day.”

Customers of Krispy Kreme, also owned by JAB, have recently had similar complaints over its loyalty scheme app and in the US, convenience store chain Circle K has just scrapped its own Sip & Save subscription scheme, launched in May 2021. Jim Winship, director of the British Sandwich & Food to Go Association, does not expect other companies to follow Pret’s example of a subscription scheme.

“It’s very complicated to do, and from what I’ve read they are struggling with it,” he says. “So much depends on the data they have got about customers and their habits. I’m not sure anyone will do anything similar until they see how the Pret one works out.”

In truth, Pret’s recent problems run deeper than misbehaving apps, with some industry analysts believing we have already reached “peak Pret” and that it has hit a glass ceiling in terms of growth.

Pret has around 450 UK outlets, and while it sometimes seems almost ubiquitous in London, it has struggled to replicate that success nationwide. In contrast, Greggs has almost 2,500 branches and McDonald’s has 1,400.

Before 2022 Pret suffered three successive years of losses, and is still having to adapt to the post-Covid world of hybrid working that has disrupted its traditional customer base of office workers.

At £7 billion a year, the British sandwich market is yet to recover to its pre-pandemic levels of £8bn. With many workers stubbornly refusing to leave home on Mondays and Fridays, Pret must now decide whether to move some of its stores to suburban locations, as some competitors have already done.

Clive Black, vice chairman of the investment group Shore Capital Markets, says: “I don’t think Pret travels well once you get away from wealthier localities. Where Greggs is very much an entry price brand that has become accepted as a mass market player, Pret is a brand that might sustain four or five shops in Cambridge but might only manage one store in Liverpool, so I do wonder if we have reached peak Pret. At the end of the day it’s not value for money for a lot of people.”