Pret A Manger reports £525m loss as chain seeks to shake off reputation for high prices

Pret A Manger has registered a pre tax loss of £525 million for its most recent financial year, as the café and sandwich chain grapples with persistent accusations of overpricing. Despite modest growth in sales, the business suffered a significant hit to its finances, precipitated by a £553 million writedown of goodwill—an accounting move reflecting a perceived erosion in the company’s intangible value and expectations for future earnings.

The trading update, covering the period up to January, reveals losses have ballooned from £62 million a year earlier. Increased economic pressures and new fiscal measures introduced in the autumn 2024 Budget prompted management to rethink long term strategies and reassess the group’s performance prospects. A statement in Pret’s annual accounts acknowledges the intensifying challenges in all key markets, with the business expecting further headwinds ahead.

To counter its expensive image, Pret A Manger is trialling new meal deals in around 70 outlets. These include a breakfast offer of a croissant with coffee priced between £4.50 and £5, and a lunch bundle of a sandwich, drink and crisps at £6 to £7. The business faces mounting competition, particularly after making headlines for a £12.95 salad—twice the price of similar items at other major retailers. The company has attributed price increases to the rising cost of ingredients, fuel, and labour, though chief executive Pano Christou insists recent menu price hikes have been kept below the rate of inflation.

Pret has also overhauled its ‘Club Pret’ subscription scheme. Previously, customers paid £30 a month for up to five barista drinks per day and a 20 per cent discount on food. The new plan offers 50 per cent off five drinks daily for just £5 a month, an adjustment Mr Christou believes has enabled the chain to temper further price increases while retaining customer value.

Current year cost pressures remain acute. The business forecasts a £15 million bill owing to changes to employers’ National Insurance contributions introduced in April, a move sector leaders warn is particularly damaging to hospitality. According to Mr Christou, Pret has been somewhat insulated, as staff remuneration is not age dependant, diffusing the impact compared to other operators.

With the British high street in flux, Pret is accelerating growth in the United States and beyond. Its network now comprises more than 700 global locations, including a major presence in New York. This international expansion helped Pret surpass £1 billion in global system sales in 2023—a first for the chain. Looking ahead, Pret’s Luxembourg based parent JAB Holding is exploring strategic options, from a potential stock market flotation to seeking new external funding, signifying ambition to drive future growth despite short term setbacks.