Pret A Manger CEO on changing lunch habits, hybrid work and value demands

From cutting back on bread to working from home on Fridays, the boss of sandwich chain Pret A Manger has learnt quite a lot about our habits. We are apparently increasingly on the hunt for green leaves, slowly venturing into the office more, and occasionally treating ourselves to larger, more expensive protein and fibre-packed options as we prioritise health, human connection and flexibility. Cutting across our changing lunch and commuting habits is an overriding desire for good value, Pano Christou tells the BBC's Big Boss Interview podcast.

Yet Pret has struggled to shake off a reputation as being expensive in comparison to other High Street chains. It also faces a list of challenges, including inflation, measures from the Autumn Budget, and changing commuter habits post-Covid.

One of the ways Pret has tried to be competitive on price is through its subscription model, which has evolved over the years. Launched to drum up demand during the Covid pandemic, it cost £20 a month for up to five free drinks a day and discounted food. Over the next three years the price rose twice, before it was overhauled. It has been criticised for making the popular subscription model less generous. The current version now costs £5 a month, and gets customers up to five half-price drinks a day, which Pret believes is still the best deal on the market. Christou says they've seen a rise of almost 25% in people signed up in the last year.

Other outlets offer free loyalty schemes which include perks such as your tenth drink free. Costa offers customers a lunchtime meal deal where they can get a hot drink and toastie for £6.49, with the option to add a snack or water for an extra £1. Pret started trialling meal deals in a number of stores last year, saying it would test the deals at different prices to see how consumers react. Christou says customers "really enjoy getting great value", but that doesn't necessarily equate to the cheapest products.

More salad, less bread please

Case in hand is the chain's "Super Plates" salad range, which comes in at up to £12.95 a pop and raised some eyebrows when it launched last summer. Christou says salads are growing in popularity across the industry due to a "migration towards people trying to consume less bread". But despite this trend, he notes bread-based products are still the most popular choices, making up over half of Pret's top 20 items sold last year with none of the salads making the list.

He says this particular salad range - which is larger, designed to be more filling and nutrient-dense - has proved popular, with Pret selling 40% more items than expected. More of these salads are sold at the end of the day than baguettes and sandwiches, he adds, as people see them as a "very meaningful evening staple".

With the rise of weight-loss drugs, introducing bigger portion sizes may feel like an unusual move. The bosses of both Greggs and Leon have both told the BBC this is making them rethink sizing. But Christou says it is too early to tell what impact the drugs will have on businesses.

Fridays are quieter

However, one trend Christou feels is more definite is workers' gradual return to the office after the rise of working from home during the pandemic. "We do think that might be a slow trend that continues," he says. He says Fridays are "definitely quieter" in Pret stores, which are concentrated in city centres and transport hubs, and he doesn't think there will be a return to a five-day working week. Each store will continue to stay open a minimum of five days a week though - whether that be week days or over the weekend, location-dependent.

"My sense is that during Covid, a lot of people that work from home, they had existing relationships with folk in the working environment," he says. "And there's more and more new people come in to roles and jobs... people want that flexibility, but also understand the importance of human connectivity as well."

Pret is trying to change where its shops are in reaction to these changes in commuting and working patterns, but it has not been able to do so quickly. As retail analyst Jonathan De Mello says: "Though Pret has pivoted post-Covid to more residential locations rather than purely worker driven city centre locations, hybrid working continues to impact demand, as the bulk of their estate remains in city centre locations."

'People don't have as much money'

Rising costs are clearly a concern for businesses and consumers. Pret's latest accounts, for 2024, show like-for-like sales were up 2.8%. But overall it made a heavy loss after a £500m write-down linked to a reassessment of the company by owner JAB, which took into account the "uncertain" global economic picture and extra business costs brought in by that year's Autumn Budget. It also says it faced £20m in higher costs last year due to high levels of food price inflation but didn't pass this on to customers.

The chain is experiencing inflation from the US-Israel war with Iran, Christou says, though he adds there are no supply issues in the UK. With trucks bringing fresh produce to its 550 stores across the UK every day, Pret has been affected by the fuel price volatility of recent weeks. Christou says Pret has no plans currently to pass the recent cost increases on to customers who "don't have as much money... [and] are looking more for value".

De Mello says that unlike its rivals Pret seems to have "chosen to pass on the bulk of this increased cost to customers to protect margins". "Ultimately, Pret customers are paying for consistency and convenience," he adds. Whether customers will continue to choose to pay for that convenience remains to be seen.