Porter's Five Forces model - Pret A manger

Pret A manger is a catering company founded in Great Britain in 1986 which, in 2021, has more than 13,000 permanent employees, a figure which has fallen sharply since the start of the health crisis. Indeed, the group had to cut more than 3,000 jobs and closed about thirty stores.

Porter's five forces model - Pret A manger

Credit Photo : Pret A manger

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There are, however, nearly 400 restaurants around the world, the majority of which are in Great Britain. Sales fell almost 60% in 2020.

The outlets were mostly placed near offices, but also in shopping streets or transport areas.

The principle is the sale of fresh products in the form of wraps, salads and sandwiches in ecological packaging and intended for consumers in a hurry and concerned about quality. The products are made in an independent kitchen within the store.

In 2001, the giant McDonald's bought 33% of the company's shares.

The turnover in 2020 was 880 million euros against more than one billion the previous year.


Porter's forces

New entrants

The threat from new entrants is particularly high. Indeed, many players are interested in this segment which is similar to that of fast food. The barriers to entry are quite strict, more and more so with all the new standards which govern the market nevertheless demand is very important. Consumers are on the lookout for new trends that allow them to eat quickly and consume fresher and healthier products than in traditional fast-food restaurants.


Substitute products

The threat here is relatively stable because Pret A Manger is a brand that sells food, and for this purpose, it sells something essential for all consumers. Of course, the competition is very keen, and customers really have an important choice in the matter, but in this case, the trend is more and more towards this type of product, which makes it a leading segment in the market. What can be substituted would be homemade dishes, for example.


The bargaining power of clients

This power remains high precisely because of the intensity of competition. It is generally found that the more choices the clients have, the greater their power.

This power can relate to the marketing strategy but also to the prices in their entirety.

The group defines its strategy according to customer demand and new trends appearing in the market. The customer is, therefore, very influential.


The bargaining power of suppliers

Pret A Manger brands have different types of suppliers, which have different degrees of importance. Thus, the group focuses its strategy on the manufacture and sale of fresh products, the suppliers who support these products are eagerly awaited and, therefore, important. For packaging, it's the same thing, it is important for the brand to have ecological packaging. The bargaining power of suppliers depends on the ease with which the group can find other equivalents.

Nevertheless, Pret A Manger is a group that prefers to work for a partnership relationship with suppliers because the two parties remain, despite everything, very dependent on each other, with a view to customer satisfaction and, therefore, increased sales over the years.


Intra-sector competition

Competition in the sector is very high. Pret A Manger suffered heavy losses during the pandemic, which contributed to its weakening. Among the competitors, we can cite fast-food restaurants, and also pizzerias, kebabs, and all the supermarket chains, which also offer ready-to-go meals. Bakeries also appeal to consumers with their low-cost formulas.

The competition has widened further with the trend of home deliveries. Indeed traditional restaurants also offer their own menus to consumers who appreciate the idea of eating at home as in a real restaurant.


Sources : Capital, Observatoire de la franchise