Pret a Manger is introducing meal deals to compete with supermarkets, following a significant drop in the company’s value, due to the challenges faced by the hospitality industry.
Pret intends to trial the meal deal format in the last quarter of the year as a strategy to expand the Pret brand and regain sustainable profitability. The exact pricing of these meal deals remains undisclosed.
In the UK, the meal deals will be available in three options throughout the day: a croissant with coffee for breakfast, crisps with a sandwich, and any lunch item with a snack and a drink.
Pret had already launched a meal deal in France earlier this year, which is performing well.
Pano Christou, Pret’s CEO, stated that the focus will be on increasing customer transactions and offering better value for money to drive sustainable growth for Pret.
Meal deals have long been offered by supermarkets and high street retailers, with prices creeping up amid rising food inflation. Tesco, for example, has increased its meal deal price by 25p to £3.85 for Clubcard holders.
Pret’s parent company, JAB, which acquired the chain for £1.5bn in 2018, reported a £525.5m pre-tax loss last year, including a £552.9m non-cash writedown that represents a one-third decrease in the chain’s value compared to its acquisition price.
The company justified the writedown by citing the uncertain global macroeconomic environment and additional costs from the recent budget, including increased employer national insurance contributions and the minimum wage.
Despite the writedown, Pret reported an operational profit of £98m, representing a 36% year-on-year increase, and like-for-like sales growth of 2.8%. Total revenues including new openings increased by 10% to £1.2bn.
Christou confirmed that Pret will continue to make disciplined decisions to protect sales, and the company will focus on expanding its market share in the UK and internationally, prioritizing city centers and travel hubs.
Pret recently discontinued its popular five-drinks-a-day subscription service and replaced it with a new membership program. Additionally, there have been discussions about Coca-Cola potentially selling Costa Coffee for a fraction of the price it paid to acquire the chain in 2018.
