DCSIMG

Pret A Manger to continue on growth trail with more outlets

The private equity-owned sandwich and coffee shop chain said it intended to continue expanding this year after delivering a year of growing profits and sales.

Meanwhile, leisure group Whitbread moved its finance director Chris Rogers to head up its Costa Coffee chain, with a remit to deliver ambitious overseas expansion plans.

Coffee shops are booming despite weak consumer sentiment and uncertainty on the high street.

Pasty and sausage roll chain Greggs is considering moving into the sector after a testing the concept with a Greggs Moment outlet.

Chief executive Clive Schlee said Pret’s success during the downturn was due to “sticking to our knitting” through a combination of fresh food made on site, acquiring good locations and cheerful staff.

“That’s a recession-busting thing there – to give staff confidence that in bad times they are still appreciated,” he said.

“Demand (for coffee shops) still seems to be going up, the trends are still saying it is increasing. We can grow steadily.”

The chain, which opened in London in 1986 and has 286 shops mainly in the UK, said sales rose 15 per cent to £377.3m in the year to December 29.

Earnings before interest, tax, depreciation and amortisation were up 14 per cent to £52.4m, boosted by opening 24 stores.

The firm employs nearly 5,000 people in the UK and gives its leftover food to the homeless.

It pledged to open 20 more stores overseas in 2012, including its first in Boston in the United States, plus two more in Paris – a total of 44 openings.

Pret, which has grow as a London-focused chain, plans to expand in the North and is opening outlets on sites in Scotland and Manchester.

Mr Schlee said the group will grow from its current scattering of sites in Leeds and York over the next couple of years.

“Leeds as a city is shifting quite a bit. We’ve got to let the lie of the land settle. Harrogate is probably on the shopping list as is Meadowhall in Sheffield – when the right deal comes up.

“Our shops are much busier than coffee shops and we have to go to bigger towns because we need higher volume.”

Mr Schlee said despite the tough high street, rents will “take time to settle” as landlords adjust to the situation due to long-term leases.

But he added landlords “will accept lower returns because they are frightened of having their properties vacant”.

“Twenty per cent of the high street has gone to the internet. There has been a fall-out on the high street from that.”

Pret is majority owned by private equity firm Bridgepoint, which also owns Leeds Bradford airport.

It acquired the chain in a 500m euro deal in 2008.

About 120 staff at the 25-year-old chain hold a minority stake in the business.

Mr Schlee said Pret is keen to take on school leavers, and will contact school careers departments.

“Pret managers run £2m businesses,” he said. “They can be 23 and leading a team of 30.”

The group’s international expansion saw Pret open two chain in Paris in recent month.

“We have been very pleased by the response of the French public,” said Mr Schlee.

“Sandwiches and salads with British chicken, fresh avocado or crayfish in the recipe are selling in large numbers.

“Parisians eat more puddings and fewer crisps than their London counterparts and they are very fond of our carrot cake and home baked cookies.”

Costa, the UK’s biggest coffee shop chain with almost 1,400 outlets, yesterday said Mr Rogers will replace John Derkach who is leaving to become CEO of Tragus Group, which owns the Cafe Rouge, Bella Italia and Strada brands.

Whitbread CEO Andy Harrison said: “Chris has played a major part in Whitbread’s strategic development and, as a long standing member of the Costa management board, understands the vital brand and cultural DNA which has driven its success.

“Costa has an exciting future within Whitbread and Chris will spearhead our ambitious growth plans, which will create substantial shareholder value.”

The group plans to increase the size of the business to 3,500 stores worldwide by 2016.

It already has 800 units in 25 overseas markets, including China and India.

The appointment of Mr Rogers is likely to heighten talk that Costa could eventually be spun out of Whitbread.

 

Comments

 
 

Back to the top of the page