Pret A Manger chief executive Clive Schlee talks to Mark Wingett about the key challenges facing the $1bn company as it celebrates its 30th birthday
For Pret A Manger chief executive Clive Schlee the business he has been head of since 2003 is like a human being. “All births are dramatic/risky, and Pret in its infancy was very fragile,” he explains. “It had very troubled teenage years in the early 2000s. I hope now it is a more poised 30-year-old.”
This summer the company, which opened its first site in 1986, celebrated its 30th birthday, not that you would have noticed. As with most things Pret does, and in the mould of its chief executive, there was no fuss made of the milestone – humility and modesty being watchwords for a business that now generates $1bn in turnover, operates 350 Prets worldwide, with shops in the UK, USA, Paris, Hong Kong and Shanghai, and serves more than 300,000 customers every day.
But how has it got to the stage of being revered by the majority of its rivals, across the entire seating and drinking-out sector. When pushed, Schlee picks out three challenges that the brand faced and which have been key to its development and success.
Engaging the staff
The first is how you maintain the engagement of the staff. Schlee says: “I do believe the commitment of the staff is the standout feature of Pret, which we obviously have to look after. Basically, we have understood from the beginning that staff want more than just a wage, they want a future and friendship. They want to be themselves. Pret understands that. Becoming bigger doesn’t stop that, but it is something we must work hard on to maintain. This is embedded in the company’s thinking. Staff will measure you on your actions, not words, how you look after them in times of trouble, how you respond to changes like the National Minimum Wage and how you communicate with them on issues like Brexit. These things matter, they want to know you care about them. As a result of that they will work harder and the Pret staff probably work harder than anyone else in retail. And that for me is how the industry judges Pret.”
That engagement is measured and indeed highlighted by the recent appointment of Pano Christou as its new managing director for the UK.
Christou, who will take up his new role on 1 October, has been with the company since 2000 when he started as an assistant manager. For the last two years he has been the group’s UK operations director. Schlee says: “Perhaps the strength of Pret’s operations is linked to the fact that the managing directors of our three biggest markets, the UK, the US and Hong Kong, all started life in Pret shops many years ago as assistant managers - Pano in the UK, Jo Brett in the US and Sarah Lee in Hong Kong.” To underline the sense of family at Pret, I later find out that of the three managing directors, two are married to Pret people and one of those is a same sex marriage. “We are a modern family,” quips Schlee.
Innovation staves off stagnation
For Schlee there is no point just chasing innovation. “Ineffective innovation is replacing one product with another and confusing staff and consumer,” he says. “You need an absolute commitment to the quality of the business at the core, which is then the foundation for innovation. So you don’t mess around with anything that comprises the quality of the product/offer/ingredients, they stay the same, the customers are loyal to that core offer. It is around the margins where you innovate. What you are after is someone coming in to say the ‘Veggie’ Pret and saying ‘this is like Pret, but different’, that is the emotion/response you are after, which is not easy to get.”
The group’s vegetarian-influenced site in Soho, which went from pop-up to permanent addition to the group’s estate, with a further site under the format to follow in the City, underlines Schlee’s thinking. He says: “I am very happy with the learnings we got back from the trial. Firstly, it was a good exercise in consulting with consumers, secondly in using social media to generate awareness and thirdly it had an uplifting purpose that fires up staff and consumers alike.”
The group is taking the same route with its “Evening” format, which it started trialling at its site on The Strand last year.
Schlee said the group had tweaked the format, which offers hot food and alcohol, to move away from full service and create a more “natural Pret experience”. “What we have learnt is that providing full service at Pret prices is not economic. Maybe we should have known that from the outset. What we have learnt is that customers do like hot food and alcohol and are perfectly happy with the current Pret service system. So we are putting it into four or five other shops. We have put it into our Russell Square and South Kensington units.
Where we change the atmosphere through the lighting and put more hot food out and a limited range of alcohol it is a more natural Pret experience and it makes the shops more relevant for that evening market. It has been a very instructive test for us and what it has taught us is that people want hot food, atmosphere and alcohol but not the table service.”
The group’s teething problems in the US have been well documented and adjusting to local tastes internationally while you maintain the heart and soul of the concept has been, and is, according to Schlee, the group’s third main challenge.
He says: “Again you have to stick to the core of what made the concept great in the first place – handmade, preservative free, delicious food; served by proud and professional staff; in well-located, contemporary shops, that can’t be messed with.
“But if you fail to adapt to the local market at the edges of the concept, then the core business will not be enough for you to
thrive. Food cultures are very sensitive. How people eat their breakfast is something that is an ingrained habit over 20-30 years and they won’t change it just like that.
“In the US, it was very important for us to have a hot breakfast. There the intro-duction of a hot brioche and a hot oatmeal offer, for example, got the ball rolling for us. They want more customisation there, so we introduced that with our salads. You never truly feel like you have cracked a market, but we felt very good when we opened three shops taking $100k each in midtown Manhattan last year. They were big, proud, corner sites.
“In Hong Kong, we had to learn to do smaller sandwiches because they want more variety, there is also a huge demand for yoghurt and more hot food. In France, customer research suggested that Pret A Manger was seen as a ready-meal concept. They like the British staples from the core but at the edges they don’t eats crisps like we do, they eat puddings that way. They prefer to eat in, in places with high density seating. The breakfast market there is still not where the UK’s is, it is moving away from just an espresso and croissant, but very slowly.”
Schlee accepts there are always challenges outside the three factors he highlights – new openings, new areas to enter, new rivals, but he says: “Fundamentally if you achieve
those three things, you have a steady future ahead of you.” As the group enters its fourth decade it doesn’t look likely it will lose sight of those three pillars for growth.