EVEN PRET IS IN PERIL!
Sandwich chain can pay only a third of its rents as sales slump
PReT a Manger is struggling to pay its rent after a slump in sales during the lockdown.
The sandwich shop chain has offered to pay landlords only a third of what they are owed, it emerged yesterday.
With sales languishing at around a fifth of normal levels, Pret does not expect to break even until September.
On Monday a leaked video suggested the company, which is worth £1.5billion, is gearing up to slash jobs, and yesterday its boss said the firm was in the ‘eye of the storm’. Pret has most of its outlets near offices, catering for workers and commuters, as well as at airports.
But many workers are not expecting to return to the office until the autumn, with some companies saying they will wait until next year before reopening premises fully.
In a letter to landlords seen by the Financial
Times, Pret chief executive Pano Christou, said: ‘We feel strongly that the Pret brand has every reason to believe it will thrive again, but we are currently in the eye of the storm.’
Pret has grown from a single UK cafe in north London in 1983 to a global chain of more than 500, but has been hit hard by the pandemic. It is trying to drive down rents on its outlets and, like many of its rivals, was forced to raise emergency funding from the bank.
To combat the shutdown, Pret launched a range of coffee on Amazon and it will now trial clickand-collect through online delivery app Deliveroo. So far it has reopened 320 of its 434 UK stores.
Troubles at the firm, widely seen as one of the winners in the food-on÷PRINCE the-go market, have raised concerns for the wider sector.
Only half of food and drink businesses were expected to pay all their rent bill yesterday as companies hoard cash to see out the crisis.
Shops fared even worse, paying only £1 in every £8 of rent owed, showing the depth of the crisis on the UK high street.
Retailers believe the pandemic has accelerated the decline as shoppers have become used to buying online.
Numbers using shops in the first week after lockdown were down by a half on normal, despite pent-up demand for shoes and children’s clothes. The likes of Cath Kidston, Laura Ashley and Debenhams have collapsed into administration during the lockdown, while Oasis and Warehouse have become online- only brands after being snapped up by web giant Boohoo.
It is estimated that as many as 20,000 stores will close this year, up from 4,500 last year, resulting in the loss of 235,000 retail jobs.
Restaurants, pubs and bars will suffer, too, after lockdown, saying this week they expect to reopen at a loss from July 4 due to social distancing measures and customers’ fears over Covid-19. Bosses say the new rules – including bans on shouting, singing and loud music – mean many will opt to stay home or head to the park.
Families are not convinced the new one metre rule can be policed.
There is also concern over privacy after the Government said businesses would have to collect customers’ names and phone numbers to help the NHS trace Covid cases.
In New Zealand, where a similar data collection system was put in place, a woman was harassed by a Subway employee.
Hundreds of restaurants have announced they will not reopen, including more than 100 Frankie & Benny’s diners, two-Michelin-starred The Ledbury and two outlets run by celebrity chef Rick Stein.
Industry leaders have called on the Government to extend help to struggling businesses until at least the end of the year.