With sales up 16% to £594m and the creation of 526 new jobs for the 52 weeks to 1 January 2015, Pret A Manger is a food-on-the-go success story at a time when there are plenty of high-profile failures.
The average British worker spends £3.69 on lunch daily, according to research from Visa Contactless, but Pret has managed to exceed that with its average spend last year a relatively high £4.58 from an average basket size of 2.2 products.
Group marketing director Mark Palmer, who joined two-and-a-half years ago following previous roles at Burger King and Green & Black’s, is confident it can become the UK’s most important high street food brand despite working with a less than conventional marketing set-up. Pret’s marketing is creatively led in-house and its budget is almost solely pumped into improving the in-store experience and using social to talk to regular customers.
“For me as marketing director the question is: would I sooner invest in a TV campaign, which ultimately is short lived, or in actually improving the in-store experience?” Palmer says.“We have a different model here and I think we are better off by not juggling or being lobbied too much by agencies. We have our own in-house creative team, which is run by James Cannell, an ex-agency director, whose sole focus is in worrying about the perception of the brand.” Pret’s internal team is supported by agencies including Big Dog, Byte London and ITG.
Palmer adds: “For us, ad spend is improving the menu or optimising the impact of our window displays. We don’t put out paid for traditional ads and that is unlikely to change.”
A marketing boss who doesn’t spend money on traditional advertising might sound risky, but Palmer’s reliance on word-of-mouth buzz appears to be working, with the impressive numbers not telling the full story.
When Marketing Week recently broke the story of Pret’s decision to create an evening dining concept at its Strand-based store – with wine and beer served and a soundtrack of jazz between 6pm to 11pm – excitement built quickly among the national newspapers and on social media.
Palmer says the concept could be expanded across Pret’s 380-store estate: “We already have a significant number of shops that trade until late night, and we have fresh ingredients and kitchens in every shop so it makes sense for us to strengthen our evening offer. When you pay high rents on an established infrastructure, you have to look to do something new during the times of day where you’re not traditionally as strong.
“This will never be rolled out at every site but we have shops in London and some of the regional cities near shopping centres and cinemas, and there the evening trade is now a bigger opportunity than breakfast.”
Walking alongside Palmer at Pret’s quaint headquarters, tucked away behind London Victoria station, the calm atmosphere is as noticeable as the empty smoothie bottles. And Palmer says Pret’s success has been largely due to the unique way of treating staff throughout the business.
“Pret is built on being busy so we make sure there are plenty of people on the shop floor and things are energetic with plenty of tills always open to serve people quickly,” he explains.
At Pret, people who apply for a job are invited in for an experience day with existing employees subsequently given a vote on whether to add them to the staff.
Palmer continues: “We like to give our team members responsibility and show there is a real chance to be promoted and build a great career if they work hard. Our US president, Jo Brett, started out as a trainee member in one of our shops in London and now leads a prospering international market for us.”
One way Pret empowers employees is by giving them flexibility to reward regular customers with free gifts, although Palmer says Pret is currently looking into ways to introduce a digital loyalty scheme through its app.
In 2014 Pret opened 33 new shops in the UK and internationally, including its first in China, and Palmer says this growth is only just beginning.
“I think we’ll continue to grow steadily at similar levels in 2015. Where there is an opportunity is to raise our brand awareness outside of London is in cities like Manchester, Bristol and Liverpool, where we only have one or two shops and need to continue with openings.
“In the US, we have 60 shops spread over four cities, with 40 in Manhattan, New York. I only see that number accelerating as people there, like in the UK, crave a healthier option [for fast food]. We won’t just start opening hundreds of shops, as for me, taking time and opening in the right location is key, and one shop at a time is our mantra. I have 9,000 workers and if they are inspired by the brand that is the best advertising in the world.”
Although Pret’s nutritional content has been scrutinised – something Palmer says it has addressed with clearer labelling – it has been an early advocate of health trends such as the raw food diet, with the launch of cold pressed vegetable juices and kale crisps, and this health focus looks set to evolve further in 2015.
With 12% of its 2014 sales generated from new product development, Pret will next make a move into grain and noddle-based salads with its new Super Bowls range. Palmer says the majority of new product development will always be focused on healthy lines as “that’s where the demand is”.
One of Pret’s biggest magic tricks has been convincing post-recession British consumers to spend up to £4.50 on sandwiches and in excess of £3 on smoothies, but Palmer insists its prices are fair.
“We are more accessible than ever on price, with our £1.55 tuna & cucumber sandwiches and 50p bananas some of our most popular items,” he adds.
Pret has now been owned by private equity firm Bridgepoint Capital since 2008 when McDonald’s, which previously had a 33% non-controlling stake in the US branch of the company, sold its shares. Palmer insists the brand is now a very different one.
“Giving consumers what they want, which is fresh, healthy food prepared in a proper kitchen at a time where there is too much junk food, is fundamental to our growth,” he adds.
“There are brands that sell their soul a little in pursuit of growth or airtime. We are not prepared to do that.”
This story was updated on 21 April to reflect Pret A Manger’s financial results for 2014.