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

Perhaps it’s just as well that Pano Christou had no idea a global pandemic, a war and an energy crisis were on the horizon 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 corporate executive, seems remarkably upbeat considering he has been forced to deal with one nightmare after another almost from the moment he took the helm. 

Having survived Covid, Pret is now having to deal with huge increases in fuel bills, just like countless other businesses. ‘Energy costs are huge for us,’ he says. ‘We are hedged until the end of this year. We haven’t hedged for next year but you can see the increases are 150 per cent to 200 per cent. So it is enormous. 

‘It is the number one cost challenge we’re facing now. Over the past year, we’ve seen huge cost increases in all kinds of ingredients and materials, but the ones we’re seeing in energy prices are on a different level. 

‘I know there’s been some discussion about a VAT drop – and if that does happen, it will be a massive boost for many businesses. 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, as is wheat. 

‘We have seen big increases in milk. Coffee beans have gone up by 40 per cent. We try to mitigate what we pass on to customers. We have put up prices around about 6 per cent overall. 

‘Coffee was £2.95 last year, we moved it up to £3.10. People are not making their own sandwiches at home to save money yet. We did see that in 2008 with the financial crisis, so we might see it again.’ 

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

Although it was the decade when lunch was supposedly for wimps, yuppies took Pret to their hearts along with VW Golfs, shoulder pads and brick-like mobile phones. 

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

The burgundy fascia and posh 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, food from Pret would have been an indulgence his family could not afford. His father was a minicab driver and his mum a nurse who went on to work for a building society. Clothes sometimes came from a jumble sale. 

Now he eats Pret ‘a minimum of five days a week, breakfast and lunch. A smoked salmon baguette for breakfast and I drink far too much coffee’. He worked his way up to the CEO’s office from the bottom, over 22 years at the company. He skipped university in favour of a job at McDonald’s, ‘to my parents’ displeasure’. 

Rather than being the dead end they feared, he had fallen in love with the business of hospitality and a couple of years later had begun his career at Pret. ‘My mum and dad were not at all happy then, but they are happy now.’ 

His salary is £400,000 and he received long-term share options, linked to performance, taking the total for last year to £4million. 

He is, he says with pride in his voice, only the third chief executive of Pret, following Julian Metcalfe and his mentor Clive Schlee, who was at the helm for 18 years. 

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

JAB, which also owns a variety of brands including Krispy Kreme doughnuts and Douwe Egberts coffee, is the private equity division of the super-rich German Reimann family who made their money through Reckitt Benckiser. 

A stock market float is not on the cards for ‘the foreseeable future’. ‘The Reimann family want to be part of Pret for the next ten or 20 years. There is no question they are looking to flip the company. It is quite liberating – it gives us the freedom to invest in things that might take a while to pay off.’ 

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

‘It’s not a meal deal per se, but the idea is that you can buy a can of drink, a baguette or a sandwich and some crisps for under £6,’ says Christou. All of this comes when Pret is still recovering from the pandemic, when it stayed afloat only thanks to a capital injection from JAB and Beecham of £185million in February last year, then a further £106million in November 2021. ‘I was seriously worried of course. We were losing millions a day, burning cash. Furlough was a lifeline. It was very hard. Seeing a business you have been part of for so many years just disappear in front of you…’ 

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

The new openings, he says, ‘are in suburban locations and we have moved further north, to Yorkshire, Lancashire and the North East.’ 

‘Pret used to be a London thing. But it is not just for Londoners, it should be for everyone.’ 

‘We will never go back to preCovid working patterns. It will be a permanent change,’ says Christou. 

Business is slower on Mondays and Fridays as many employees work from home those days. ‘Customer behaviour changes and it is up to businesses to adapt to that,’ says Christou.

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

That means further expansion in the UK first of all. 

‘There is still plenty of opportunity for us. Wherever there is not a Pret, I am thinking how can I get one in there.’ 

He also wants to carry on growing overseas, adding to the existing 200 outlets in the US, Europe, and further afield. 

‘France has been our most successful new market,’ he says. 

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

‘We want to be genuinely worldwide. Why can’t it be like McDonald’s – we haven’t really got a British brand that has done that, so this is our aim.’