The c.500-strong sandwich chain has hired professional services firm Alvarez & Marsal (A&M) and property agent CWM to work on elements of its strategy going forward, including negotiating a new rent package for the group.
Sky News reports that people close to the company say Pret is seeking to switch to a “turnover rent” model, which links payments to the turnover achieved at each site.
As of today the group will have reopened 305 sites, having closed its entire UK estate in March as a result of the Coronavirus pandemic.
However, with many office workers continuing to work from home, the chain is likely to experience a reduced footfall across all of its sites.
“Like the rest of the industry, we have been radically adapting our business model to succeed in the face of the changing market conditions," says Pret CEO Pano Christou
"Reduced footfall, combined with high rental costs, have placed substantial pressure on our business.
“We are putting together a clear plan to address these issues and are already making good progress. While Pret may look and feel a bit different in the short term, if we take the right steps today, we’ll make sure that Pret can thrive in the future and serve even more customers with great food and coffee.”
Moving to a “turnover rent” model is something other operators, including D&D London Des Gunewardena, have said will become more prevalent in the industry as it tries to recover from the impact of the pandemic.
Speaking to BigHospitality recently for its The Future of Restaurants video series, Gunewardena said: “There was already quite a big change going on before lockdown, the restaurant industry had had CVAs and tenants that were struggling and the landlords had started to recognise the fact that things had got to change - and Coronavirus will now accelerate that.
“What we’re going to see in the future is way more turnover rents, and way fewer institutional leases where you have a base rent and it goes up every five years. I think that’s going to be ancient history.”
