Pret A Manger, the Bridgepoint-backed chain, saw sales rise 15% to £776.2m in the year to 29 December with like-for-like sales growing 4.8%. EBITDA grew 11% to £93.2m.
Chief executive Clive Schlee told MCA that sales in the current financial had remained buoyant.
In 2016 the group opened 50 new shops to take its total estate to 444. Schlee told MCA that the group was on track to continuing growing its estate by c10% each year – taking it past the milestone of 500 sites.
He said the group would continue to target growth outside of London by infilling in major cities and moving into large towns where it was currently unrepresented. Transport hubs, hospitals and universities will be a key focus going forward, including further iterations of its pared back Petit Pret format, which is currently being rolled out across tube stations.
The group created 839 jobs during 2016 and Schlee said he was encouraged by the prospects of the British labour pool, after a concerted attempt to recruit more workers domestically.
Schlee said the Veggie Pret format was one of the big successes of 2016 and that the group planned to open its first outside of London this year. He said the Evenings format continued to evolve and would be rolled out to stores that could sustain later trade.
The group reported sales up 14% to exceed $200m for the first time in the US – a market which Schlee said the company now had a good understanding of. Pret will open its first store on a university campus in the States – in Chicago – later this year.
Schlee said of 2016: “This is another year of record results for Pret and our 12th consecutive year of revenue and EBITDA growth. Pret’s simple recipe of freshly made food and fast, friendly service allows us to flourish in diverse locations around the world – from Penn Station in New York to the campus of Exeter University and Dubai International Airport.”
Speaking to MCA, Schlee said Pret was seeing a greater desire for customers to graze throughout the day – with 59% of sales now outside the lunchtime market. Breakfast remains the biggest component of that, with 25%, and the group continued to innovate in its product mix for this daypart – introducing breakfast brioches, power pots made with soft poached eggs, and a dairy-free coconut porridge.
To appeal to the grazing crowd Pret has also been focussing on its slim sandwiches and smaller soups. Schlee said veg and protein pots had also sold well out of traditional meal times.
The first Veggie Pret opened in Soho last year and was joined by a second in Shoreditch this year. Schlee said 52% of customers at the first store were meat-eaters looking to cut down while sales at the Shoreditch site were up 20% since conversion.
He said: “These two stores are serving as a beacon to develop more vegetarian food across our estate. The aim is not to start converting swathes of our estate but we will keep doing occasional ones where it makes sense. We hope to do some outside London this year.”
In 2016, 16% of sales came from Pret shops in airports and train stations.
Schlee said: “We have developed a number of key relationships in transport hubs – with Network Rail, TfL and airports and there is an appetite from both sides to do more. The airports have allowed us to further our ambitions internationally with openings in Charles de Gaulle and Singapore for example.
“Another area is hospitals. We have had a great reception to our offer in the John Radcliffe (in Oxford) and we have two more hospitals in the pipeline for this year.
“We just opened our second university site – in Southampton – in addition to Exeter.
“We haven’t really seen a huge amount of difference in the product mix at the university stores. Coffee is obviously a big seller but there hasn’t been anything that has surprised us in terms of the food mix.
“We see these areas of students, patients and travellers as real growth market for us. It takes time to develop the right relationships and we are further along with the transport hubs than we are with the universities and hospitals but it’s certainly an area of focus.”
The group currently operates four Petit Pret – which offer 3/5 of the core range – across London tube stations. The next openings will be at Farringdon and Tottenham Court Road.
Schlee said: “We came to the conclusion that full table service is not really for an operation like Pret and what our customers want from us.
“It is difficult to service all three dayparts and it’s never going to be something that will be right for all Pret stores but we will look to introduce it in stores that are bigger enough and have the demand.
“We have not seen a great desire for alcohol in Pret but in some cases it is a worthwhile addition.”
Schlee said: “We see a lot of opportunity outside of London. We are represented in the major cities but there’s still a lot of opportunity for infill in places like Glasgow, Edinburgh, Liverpool, Bristol. We are also looking at the larger towns – places like Ipswich and Sheffield.”
Pret opened 50 new shops during 2016, including 31 in the UK, 9 in the US, 5 in France, 3 in Hong Kong, 1 in Shanghai, China, and a first in Dubai.
Schlee said: “We are not the kind of company that wants to rush headlong into things. What you will see from our international expansion so far is that we are really getting to know the markets we are in. We have done that very successfully in America and now we are looking at going into universities there too – starting with Chicago.”
Schlee said that because the delivery market tended to be more heavily weighted to evenings, it was unlikely to become a major element of or rival to Pret’s business. However, he pointed to the success of its in-house Pret Delivers and said the group was working with “a couple of third parties on a test basis”. MCA understands this includes a tie-up with Deliveroo.
Pret became central to the debate over post-Brexit recruitment in the hospitality sector when HR director Andrea Wareham said only one in 50 of the applicants to its London Recruitment Centre is British.
Schlee said: “Pret has been picked out in this debate because of our exposure to London where foreign-born workers are a large and valuable proportion of our workforce. I think the Government have listened to the concerns of the industry and other businesses and are mindful of the challenges of recruitment.
“From our part we are encouraged by the prospects from the British labour pool. We have been more active in working with Job Centre Plus and more active in using social media for recruitment.”
Last month, there were reports from the US suggesting that Bridgepoint had appointed Solebury Capital to help select investment banks for an initial public offering in the US, which could take place before the end of this year.
Schlee said: “I’m flattered that Pret would be considered a worthy entrant to the US stock market but Bridgepoint have been a very supportive backer to us for a long time and they are committed to our long-term plans.”