Pret bounces back into profit after Covid losses

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5th July 2022

Bite-sized business news from the UK and beyond

Good morning Mark Zuckerberg has given Meta employees a stark warning that they need to up their game or start updating their CVs, as he says the company faces some seriously tough times. In a roundtable chat with employees last week, the Facebook founder reportedly told his staff that "there are probably a bunch of people at the company who shouldn't be here" and that he's "okay" with employees quitting.

Today's stories

Pret bounces back into profit after Covid losses
Kellogg loses battle over UK sugar rules

RETAIL
Pret bounces back into profit after Covid losses

What happened?
Yesterday Pret a Manger reported it had swung back into profit in March for the first time since Covid hit. During the pandemic the sandwich chain was closed for long periods and it accumulated losses of £570m. The company also announced that sales in the six months to June had more than doubled to £357.8m compared to last year when pandemic-restrictions were in place.

The emergence of hybrid working has changed the pattern of Pret’s demand
With more of us working from home and less in the office because of Covid, the demand for takeaway lunch has dropped in city centres. As a result, Pret has switched its focus to regional and suburban locations with the strongest growth now coming from outside of London. It hopes that opening new stores in more suburban areas will mean it can still capture consumers who are living lives closer to home and away from city centres.

Since 2020 Pret has expanded into other revenue streams less dependent on office workers. It launched a frozen croissants and cereal range in supermarkets and a coffee subscription service which is now used over 1m times a week.

The company has global ambitions
Since launching its first shop in London in 1986, Pret has grown to 442 locations in the UK. Last September it revealed plans to open 200 stores in the UK and hire 3,000 staff over the next two years.

It plans to double the size of the business within the next five years, including through international expansions. The company already has over 100 stores outside the UK including in Canada, Spain, Portugal and Ireland that it operates through partnerships. The company is aiming to enter five new markets by the end of 2023 including an Indian branch announced last week.

Other stories to keep you in the loop

London rent prices see largest annual rise in over 20 years
Motorists arrested for driving too slowly on M4 in protests against high fuel prices
EasyJet executive quits after weeks of turmoil and flight cancellations
Demand at UK’s biggest pawnbroker at record high amid cost of living crisis
Pets at Home slumps due to cost-of-living crisis biting into Britons’ pockets
Criminal courts face disruption as barristers strike for second week
Gender pay gap widens in FTSE100 boardrooms
Tesla faces fresh discrimination claim from staff
Sri Lanka energy minister warns petrol stocks about to run dry

FOOD
Kellogg loses battle over UK sugar rules

What happened?
Yesterday the High Court rejected Kellogg’s claim that new government rules to limit sugary food were incorrect. The US cereal giant had argued that the regulations, set to be introduced in October, used the wrong formula to measure the nutritional value of food.

How did we get here?
The UK is facing an obesity epidemic with around two-thirds of adults above a healthy weight, and of these half are living with obesity. Obesity related diseases like cancer and diabetes costs the NHS over £4bn a year and this is projected to rise to £10bn by 2050.

In 2020 the government unveiled a new strategy to tackle the issue which includes limiting the prominence of high fat, salt and sugar food on supermarkets shelves.

Crying over spilt milk
At a hearing in April, Kellogg argued against the government's strategy to calculate fat, salt and sugar content of cereals when eaten dry, not when taken with milk.

But the High Court said that no breakfast cereal maker had raised issues with the methodology during the consultation period about the rules.

Hitting the bottom line
Kellogg says the ruling will hit annual profits by about £5m as it agrees high-profile positions for its products on shelves, like near tills, with supermarkets. The Frosties and Coco Pops maker says it won’t appeal the decision but warned that consumers could face less choice and higher prices as a result.

Stat of the day

According to new research the number of pubs in England and Wales has fallen to the lowest level on record to 39,970 pubs in June, down by more than 7,000 since 2012

Interesting links from around the web

Have people forgotten how to behave in the office?
99 things to do when you're bored
The most expensive cities in the world to live in

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Pret bounces back into profit after Covid losses

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