Recipe for Reinvention

The British are coming! The British are coming! Pret A Manger is a London-based company with ambitions to revolutionize that uniquely American institution: the fast-food restaurant. Its sandwiches taste great — and its growth strategy offers plenty of food for thought.

Fast food has to be one of America's least-appetizing exports. The industry offers bland products, miserable employees, and an approach to strategy that celebrates conformity. London-based Pret A Manger, a fast-growing force in the quick-serve business, has concocted a recipe for reinvention — and now it's exporting its ideas to the Home of the Whopper.

Pret A Manger (the name is faux French for "ready to eat") operates 118 shops in the United Kingdom, along with 5 in New York and one in Hong Kong. Entering one of its restaurants is like stepping inside a giant, bright, stainless-steel lunch box. On the left is a wall of open, clean, refrigerated shelves stocked with sandwiches made fresh that day, in that shop, primarily from ingredients delivered earlier that morning. (Customers can also choose from other freshly made items, such as salads, yogurt parfaits, blended juices, and sushi.) At the back of the cozy space is a counter where customers can order espresso and pay for their meals. To the right is a small seating area filled with stools and cafe tables — although, on average, customers spend just 90 seconds from the time they get in line to the time they leave the shop.

Founded in 1986, Pret aims to be the fast-food chain that elevates expectations about what fast food can be — and that writes the book on how to grow a fast-food empire while holding on to its integrity. "Growth is sexy, but it's also dangerous," says chairman and CEO Andrew Rolfe. "We ask, How do we grow this business in such a way that we're still proud of it?"

Pret's most powerful insight: You can organize a mass-market business around innovation rather than standardization. Last year, the company introduced 111 new items to its menu (and retired almost as many). It is constantly tweaking the menu choices. Pret's brownie recipe has been revised more than 30 times in pursuit of perfection. Rolfe holds his head in his hands, Hamlet-like, when he considers the possibility of introducing hot croissants to the menu. Will the fillings dry out too easily? There's only one way to find out. "We don't believe in focus groups, research, or advertising," says Rolfe. "We have a very simple principle: If it doesn't take, we stop selling it."

Pret doesn't mass-produce employees either. Frontline workers aren't pigeonholed into performing repetitious tasks all day, they aren't given scripts, and they're treated to weekly Pret-organized pub nights. Many long-serving store managers have equity in the company, and few work nights or weekends — which is a rarity in the restaurant business.

Rolfe, who was VP of European operations for PepsiCo Restaurants International before he joined Pret, understands that his company poses a challenge to conventional wisdom in his business. And he is hungry to test his strategies in the United States. "Since World War II, America has given the world Burger King, KFC, McDonald's, and Pizza Hut," Rolfe says. "Nobody has ever gone to America, the home of fast food, with a concept that turned out to be a successful national chain. We think we can do that."

But changing the game doesn't mean working alone. In early 2001, Pret brought on a powerful partner to help with its conquest of North America and the world: the McDonald's Corp., which bought a 33% stake. Rolfe says that the fast-food behemoth has already been a big help in cutting real-estate deals in Hong Kong, for example. Rank-and-file employees worried that McDonald's might somehow corrupt Pret's values or its dedication to healthy, carefully made food. Rolfe is less concerned. "We have a strong focus on food and a strong entrepreneurial spirit," he explains.

Part of that spirit involves Pret's Buddy System. New managerial hires spend two weeks working in a shop when they first join the company; they then spend one day of each quarter at an assigned buddy store. In part, it's a way for executives to see how the policies that they set affect employees and shop managers. But each shop's buddy also serves as an informal conduit back to headquarters.

Generating fast feedback for its headquarters is especially important as Pret expands beyond its native England. Some of Pret's popular British sandwiches did not exactly seduce American taste buds when the chain opened outlets in New York in the summer of 2000. (Pret expects to end the year with at least a dozen shops in the city.)

Jay Willoughby, the company's president and chief operating officer in the United States (and a former executive with Pizza Hut and Caribou Coffee), says that the All Day Breakfast Sandwich, stuffed with bacon, sausage, egg, and enough mayonnaise to spackle a wall, has been discontinued in New York. The butter on the smoked-salmon sandwich has been replaced with cream cheese in the States, but Willoughby says that Pret's very-British Coronation Chicken, with mango chutney, has proved surprisingly popular. And earlier this year, New York shops introduced their first menu item not originated in London: that hometown staple, pastrami on rye.

Back in London, CEO Rolfe is sitting at a table in his office, reviewing a summary of customer comments, which he receives every Friday. "Some of this stuff goes against the grain of what we do," he says, like the customers who want Pret to offer a wide array of hot food or more seating. What helps the company achieve some of the highest sales-per-square-foot averages in the quick-serve sector is the chain's high throughput: Most customers select their food, pay for it, and leave — fast. But Rolfe says that Pret will soon offer hot soup in Britain, as it does in New York. The company also responds to customers who protest when favorite sandwiches — such as the Moroccan lamb wrap — are cycled off the menu: Pret reintroduces items with a big "I'm Back" sticker on the box. "It makes customers realize that we listen," he explains.

Rolfe says that one of the biggest challenges he faces is keeping Pret true to its egalitarian roots in the wake of the McDonald's investment and the increasing pressure to take the privately held company public to finance its expansion in the United States and Asia. "I took this job because my personal values and the company's values match," Rolfe says. "I wanted to be myself and make decisions based on what's right. There's no reason I would allow anything to change that." Learn more about Pret A Manger on the Web (www.pretamanger.com). Read Scott Kirsner's account of his day making sandwiches in London here.

Sidebar: Service, for a Change

"Would you like fries with that?" It's the unofficial motto of a workplace that treats frontline employees like so many cheeseburgers. Pret A Manger has a different approach. Many of its workers and managers are refugees from the Golden Arches, having gravitated to Pret because of its higher pay, limited schedules (most shops are open weekdays from 7 AM to 5 PM), and complete lack of grease-spitting deep fryers.

Ewan Stickley, Pret's head of training, explains that the company doesn't try to mold its employees into automatons. "There's no script," he says. "We don't want you to be a drone. Our customers say, I like to be served by human beings."

One way to hire the right people is to let the right people help with hiring. Job applicants go through a trial day, during which they work at a shop. The team then decides whether the applicant would make a good addition.

Once they pass the test, employees are eligible for a variety of incentives. If a customer compliments an employee by name on a comment card, that staffer earns a silver Tiffany star to wear on his uniform. Employees who send in the best ideas for changes to procedure or products can win up to $1,500. The Sunday Times of London has listed Pret A Manger as one of the top 50 companies to work for in Britain — the only restaurant chain, fast food or white tablecloth, to make the cut.

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