Pret A Manger is increasing the price of its coffee subscription service by 20 per cent, saying it needs to preserve profit margins in the face of “stubbornly high” inflation.
The sandwich chain told customers on Wednesday that from June their subscription fee, which includes up to five hot drinks a day, will rise to £30 a month, the second price increase since the service was launched in 2020.
Pret also announced it had widened the subscription, which has been rebranded Club Pret, to include a 10 per cent discount on food and some cold drinks.
Pano Christou, Pret’s chief executive, said the price rise was necessary to “maintain its existing margins” while inflation in energy, labour and food and drink costs remained “stubbornly high”.
“I’m an optimist by nature so I hope that inflation will come down, but I’m not sure if it will be coming down over the next six months or so,” he added.
In an email to customers on Wednesday, Pret said that of the £5 a month price rise, “around £1 will cover increasing ingredient prices, £2 will go towards Pret team pay, and around £2 will help with rising energy costs”.
Pret has increased staff wages three times since April last year in a very tight labour market. Ingredient costs have also risen: smoked salmon prices have increased by 40 per cent in the past year and wholesale pork prices are up 20 per cent, Christou said.
The subscription service has become an important part of Pret’s business model, helping it offset a drop in customer numbers because more people are working from home. More than three-fifths of Pret outlets are in Greater London and about a quarter are located in central London.
About 35 per cent of its customers have a subscription. The service is used about 1.25mn times a week at Pret’s 439 UK shops and its international outlets in the US and France, up 11 per cent year on year. The average subscriber spends nearly four times as much as other customers.
“We could have sat here and said 40 per cent of our business will disappear overnight because people are coming in [to offices] three days a week instead of five days a week,” Christou said.
“But we said, actually, ‘how can we get those people who are coming in two or three days a week to come in [to Pret] more often?’”
The sandwich chain had already increased prices on some bakery items this year and Christou said he was conscious that the subscription price rise came at a “very challenging time” for customers. But he insisted it still offered “fantastic value for money”.