What might the Pret Index tell us about the changing UK labour market?
Why might a real-time weekly index of till-sales at Pret tell us about the changing nature of the labour market?
The ONS now publishes the Pret Index - which shows the value of sales across the titles at Pret outlets measured as a proportion of the average weekly level in the first four weeks of 2020 just before the first pandemic lockdown.
In the week ending 30 June 2022, the Pret Index showed transactions in the "West End" and "City Worker" groupings of London were lower than pre-coronavirus pandemic levels (at 94% and 86%, respectively), but transactions in the "Suburban" group were higher at 123%.
Pret A Manger is a franchise chain, operating around 440 stores across the UK and this microeconomic data offers a rich source of information about how changes in employment patterns might be affecting consumer spending behaviour.
There has been a large and perhaps semi-permanent shift in working patterns during and since the pandemic. The latest ONS figures show that between October to December 2019 and January to March 2022, home-working in the UK more than doubled from 4.7 million to 9.9 million people.
The pandemic and 2020-21 recession hit Pret very hard especially during periods when stores were closed and mandatory work-from-home restrictions were in place. Over two years, Pret lost a cumulative £570m and the future of the business was in serious doubt in part because around a third of their stores were in London.
The shift in working patterns has prompted a change of approach for Pret. The company has switched its focus from city centre outlets to out-of-town shops and to towns such as Harrogate in Yorkshire. More than a third of Pret’s UK shops are now located in regional cities and towns and sales in these stores are rising strongly helping the business to return to profitability.
Pret is now focused on international expansion. Since September Pret has signed deals to open shops in Canada, Ireland, Spain and Portugal and a major joint venture with Reliance Industries to expand in India.