China Daily Global Edition (USA)
Fast and faster
British fast food chain due to open first outlet in Shanghai’s newest mall
A British fast food chain is about to set off a food fight in one of Shanghai’s most recent shopping mall and office developments.
A battle is about to commence on Oct 16 at the back lobby in K11, one of Shanghai’s recent shopping mall and office developments, a battle not fought with guns and rifles but with Scottish salmon and egg mayonnaise.
It is a battle about sandwiches, the triangular slices of bread filled with delicious fillings that have been sold from street side groceries at less than one dollar to the most high-end Western-style restaurants on the Bund, replacing dumplings and rice as the major staple at lunch for millions of office workers in Shanghai and the rest of China.
As the British fast food chain Pret A Manger makes a final sprint toward the opening of its first outlet on the Chinese mainland, radical changes are expected in the fast food industry in China, which has long been dominated by fries and burgers.
“What we offer is real food,” said Clive Schlee, the CEO of the London head quartered company. Founded in 1986 by two college graduates, the company is hailed as “launching a high-street food revolution” by offering packaged sandwiches, freshly wrapped from the back kitchen of the shop. Just as its name means in French — “ready to eat”.
From its signature superclub sandwich to hot soups tailored for the Asian market, the common factor of all the food is no chemicals, no additives and everything is organic.
“Pret is coming with a level above the average foreign fast food chain,” said Schlee. “We are targeting young office workers, which has been our tradition right from the beginning.”
With a decade of working experience in Hong Kong for multinational conglomerate Jardine Matheson, in charge of the group’s fast-food brands such as Pizza Hut, Sizzler and Taco Bell, Schlee believes that Chinese young people have a much larger appetite for Western food than their parents’ generation.
Shanghai has no shortage of cafes-and-wich-shop chains to meet the growing demand.
In 1999, just before Pret A Manger’s founders Sinclair Beecham and Julian Metcalfe were awarded an MBE in the Queen’s Birthday Honours List for services to the catering industry, the Denmark entrepreneur John Christensen found a spot for himself in Shanghai’s food business with a Nordic-style coffee and sandwich shop called Wagas.
In 2002, as the British chain started its expansion into Asia, first in Japan and a month later Hong Kong, a former chef from United States who made a living by teaching English in Shanghai, Scott Minoie, resumed his previous profession by starting a slightly more-formal-than-cafe restaurant called Element Fresh. He was driven by a similar goal — to satisfy the need for an original, safe and delicious sandwich or meal.
Both of those two ventures have become successful food companies overseeing a total of twenty-or-so outlets mainly in Shanghai and Beijing, with local Chinese making up the lion’s share of their clientele. At some of Wagas’ less centrally located stores, the percentage of local Chinese could be as high as 80 percent, the company said.
“Back in 1999 many of our Chinese customers were simply curious or interested about Western food,” said Jackie Yun, the managing partner of Wagas. The Australian-born-Chinese joined Christensen soon after he founded the cafe.
“They did not necessarily enjoy eating sandwiches or salads. In fact they would find it strange that we did not cook our lettuce, while now the eating habits and palates of Chinese people are much more sophisticated,” she said.
Wagas, now a multi-concept restaurant group with six brands, including a bakery, doesn’t provide its business revenue or growth rate.
Scott Minoie, the founder and CEO of Element Fresh, said in an earlier media interview that in 2011, his company has raked in 200 million yuan, 40 percent up from the year before.
“Competition is fierce compared to a decade ago and the market in first-tier cities is mature,” said Yun from Wagas.
“In this day and age it is too easy to get complacent. There isn’t much room for complacency in such a competitive market. You see cafes/restaurants come and go on a daily basis,” she said, believing Wagas entered the market at just the right time.
But Schlee doesn’t think it would be too late to have the first Pret A Manger in China now.
“In the food business, the time of entry is not so important. If you are a great operator, people will come to you,” he said.
“You have to be a strong business to go into China. You have to build a strong business in the rest of the world first to support going to China, because a Chinese project is a big project,” he added.
Pret A Manger has 350 shops worldwide. While most are in the UK, the company has gained a foothold in the United States, Hong Kong and France. And Schlee believes the global presence of Pret has already made the brand “powerful in China, among both locals and expats”.
His confidence seems grounded. At two of the most popular search engines in China, Baidu.com and Bing.com, the top related words popping out, after typing in key words Pret A Manger, include “Shanghai” and “K11”, the location of its first outlet in China.
On dianping.com, China’s most widely used dining guide and rating website with 3.5 billion visitors every month, a spontaneous page about the sandwich shop has been set up and filled with all positive comments since July, three months before the official opening. The comments, all in Chinese, have mostly mentioned the pleasant experience at the Pret A Manger stores in other countries and are loaded with anticipation.
Although Schlee sees the competition in the market more as “a competition with Pret itself”, one of the major challenges for foreign companies to operate in China is the management of the unstable, if not unsafe, food supply chain.
In July, US fast food chain McDonald’s and KFC were caught supplying out-of-date meat from an Americanowned food processing plant in China. And this is not the first time the two restaurant giants were hit by food safety issues in China.
“The scandal may mean people are most sensitive to food safety and they will probably have more trust in Pret. And Pret would make sure the trust is not wasted,” he said, referring also to the tough time in SARS-hit Hong Kong in 2003, when Pret was “doing very well” with trust and integrity.
While the slogan from the draft menu provided to China Daily states “the best ingredients from around the world”, the management team from the food department of the company confirmed that 70 percent of the food made and sold in Shanghai will be locally sourced instead of imported.
And Schlee thinks that Pret A Manger’s brand name is strong enough to “give protection” to the food his team has been spending the past two years researching.
“I am confident Pret will be good in Shanghai. We are doing the business not for now, but for 2025. It’s a longterm plan,” he said.
Although he wouldn’t be drawn on the number of outlets planned to open in Shanghai by 2025, he admitted that Pret A Manger is looking around at more locations in Shanghai.