Pret’s Pano Christou wants to take chain global like McDonald’s

Perhaps it’s a good thing Pano Christou had no idea that a global pandemic, war and energy crisis were on the way when he took over as chief executive of sandwich chain Pret a Manger in the summer of 2019.

The 44-year-old boss, who looks more like a hipster dad than a business executive, seems remarkably cheerful, having been forced to deal with one nightmare after another almost from the moment he took over.

Pret has survived Covid and, like countless other businesses, is now facing massive increases in fuel bills. “The energy costs are huge for us,” he says. ‘We are covered until the end of this year. We haven’t hedged for next year, but you can see the increases are 150 to 200 percent. So it’s huge.

“It’s the biggest cost challenge we face right now. Over the past year we’ve seen huge cost increases for all kinds of ingredients and materials, but the ones we’re seeing in energy prices are at a different level.

“I know there has been discussion about a VAT reduction – and if that happens, it will be a huge boost for many companies. But we also need to do more than hope for a handout. We have to do what we can to manage the risk and adapt.’

Ingredients in Pret products are also going up. Sunflower oil, much of which comes from Ukraine, is rising in price, just like wheat.

‘We are seeing large increases in milk. Coffee beans are up 40 percent. We try to limit what we pass on to customers. We’ve raised prices around 6 percent overall.

‘Coffee was £2.95 last year, we’ve increased it to £3.10. People don’t make sandwiches at home yet to save money. We saw that in 2008 with the financial crisis, so maybe we’ll see it again.’

Entrepreneurs Julian Metcalfe and Sinclair Beecham opened the first Pret store in London’s Victoria in 1986, as the capital was buzzing with excitement over the Big Bang in the City.

Though it was the decade when lunch was supposedly for the faint of heart, yuppies took Fun to their hearts along with VW Golfs, shoulder pads, and stony cell phones.

With its classy-sounding (but actually cod-francais) name – ‘It’s not really French,’ admits Christou after some insistence – branches sprouted all over the capital.

The burgundy fascia and chic baguettes arranged in gleaming stainless steel cabinets were very different from the “limp lettuce and curly crust” sandwich bars that came before.

For a young Christou growing up in Tooting, South West London, eating out of Pret would have been an indulgence his family couldn’t afford. His father was a taxi driver and his mother a nurse who later went to work for a construction company. Clothes sometimes came from a flea market.

Now he eats Pret’ at least five days a week, breakfast and lunch. A baguette with smoked salmon for breakfast and I drink way too much coffee’. He worked his way from the bottom up to the CEO’s office, over 22 years with the company. He dropped out of college in favor of a job at McDonald’s, “much to my parents’ dismay.”

Rather than being the dead end they feared, he had fallen in love with the hospitality industry and a few years later he had started his career at Pret. “My mom and dad weren’t happy at all then, but they’re happy now.”

His salary is £400,000 and he received long-term stock options linked to performance, bringing last year’s total to £4 million.

He is, he says with pride in his voice, only the third CEO of Pret, after Julian Metcalfe and his mentor Clive Schlee, who spent 18 years at the helm.

He says he is “very close” to Schlee. Julian Metcalfe hasn’t been involved with the company for 15 years, but “Sinclair is still an investor and he’s there to call on if I have any questions. He has that wisdom,’ he says. Christou describes Pret’s owners, JAB Holdings, who bought the chain for £1.5bn in 2018, as ‘very supportive’.

JAB, which also owns several brands including Krispy Kreme donuts and Douwe Egberts coffee, is the private equity division of the super-wealthy German Reimann family that made their money through Reckitt Benckiser.

An IPO is not possible ‘in the near future’. “The Reimann family wants to be part of Pret for the next ten or twenty years. There is no doubt that they want to turn the business around. It’s quite liberating, it gives us the freedom to invest in things that can pay off for a while.’

In response to the cost of living, Pret has launched a range of cheaper products.

“It’s not a meal deal per se, but the idea is that for under six pounds you can get a can of booze, a baguette or a sandwich and some chips,” says Christou. All of this comes as Pret is still recovering from the pandemic, when it was only afloat thanks to a capital injection from JAB and Beecham of £185m in February last year, and then another £106m in November 2021. seriously concerned about Course. We lost millions a day and burned money. Leave was a lifeline. It was very difficult. Just watching a company you’ve been part of for so many years disappear right in front of you…’

The company made a pre-tax loss of just under £270 million last year, but said in the summer it was making a profit back for the first time since the pandemic, after moving from the city center to out-of-town shops. Pret has 430 stores in the UK, of which about 200 are in London. As a result of Covid, Christou says ‘we have re-evaluated the estate’, closed about 30 stores, five of which have returned, and opened 30 to 40 new ones.

The new openings, he says, “are in suburban locations and we’ve moved further north, into Yorkshire, Lancashire and the North East.”

“Fun used to be a thing in London. But it’s not just for Londoners, it should be for everyone.’

“We will never go back to pre-Covid work patterns. It will be a lasting change’, says Christou.

Business slows down on Mondays and Fridays as many employees work from home those days. ‘Customers’ behavior is changing and it’s up to companies to adapt to it,’ says Christou.

He is determined not to be distracted by the current difficulties of his grand plan: to become a global brand on a par with McDonald’s.

That means first and foremost further expansion in the UK.

“There are still plenty of opportunities for us. Where there is no Pret, I think how can I get one.’

He also wants to continue growing abroad, in addition to the existing 200 locations in the US, Europe and beyond.

“France has been our most successful new market,” he says.

There are also plans to open in Spain, Kuwait and India.

‘We really want to be global. Why can’t it be like McDonald’s – we don’t really have a UK brand that has done that, so this is our goal.”