UK prepared food chain Pret a Manger eyes Israel

Pret a Manger branch / Photo: Shutterstock, Shutterstock.com

Pret a Manger is in talks with Israel's largest restaurant group Café Café, which seeks to open 70 branches in Israel.

The Café Café group, controlled by Ronen Nimni, is negotiating to bring UK prepared food chain Pret a Manger chain to Israel, sources inform "Globes." The group believes that it is worthwhile opening 50-70 branches nationwide of 100 square meters each. As in Pret a Manger's model elsewhere, each branch will have a rear kitchen and seating for eating on the premises.

Pret a Manger is a coffee and sandwiches chain with over 500 branches and annual sales turnover of £880 million. The chain, managed by Pano Christou, operates in the US, Europe, China, Hong Kong, Dubai, and Singapore. Like other international chains, Pret a Manger has self-service shelves for hot food and refrigerators. The customers themselves collect the products and go to the cashier only to pay.

Café Café, currently the largest restaurant chain in Israel, operates 15 brands. Its annual revenue turnover is NIS 200 million, and it mostly uses a franchise model with 300 sales points. Until now, the group has operated with two methods: chains that it initiated and founded by itself, and chains that it has acquired fully or in partnership. Prominent chains in the group include Café Café, Fresh, Ruben, Hasushia, Lehem Erez, Kaspi, Nagisa, Sahbak, and others.

In recent months, Café Café considered the option of cooperating with Starbucks, Pret a Manger's competitor, but the negotiations were unsuccessful, and it appears that Café Café has more faith in Pret a Manger's format. In contrast to Starbucks, which sells mainly products for consumption on the road on a format of coffee with pastry or a sandwich, Pret a Manger offers real ready meals with an option of eating them hot sitting on the premises. Purchases at Pret a Manger are larger.

The Israeli restaurant sector has become crowded and cutthroat in recent years, with businesses that are not part of a chain or large group finding it difficult to survive. The challenges in the coffee and restaurant sector have made even more acute by regulatory changes, an increase in the minimum wage, the bottle deposit law, the waiter tips taxation law, and the crackdown on foreign workers.

Alongside these difficulties, however, the demand for restaurant businesses in shopping malls and commercial centers has risen dramatically in recent years as a result of the crisis in the fashion industry, which has seen chains collapse and tenants leave, resulting in a great deal of empty space. Shopping mall owners are therefore pursuing the large restaurant chains and offering them substantial partnerships in building branches. This has made costs of expansion lower than in the past, certainly for large players seeking to establish a chain in a short time.

In recent years, many chains in the Israeli market have tried to develop concepts inspired by Pret a Manger, but none of them has really taken hold. "Globes" recently reported that Rami Levy was trying out a new format, inspired by the ready meals concept at Pret a Manger, in branches of the Super Cofix chain that he acquired.

Pret a Manger was acquired for £1.5 billion by the Reimann family from Germany through JAB Holding, its investment fund. Six months ago, Pret a Manger acquired Eat, a rival coffee chain in London.

Café Café said, "We are Israel's largest restaurant group, with over 300 cafes and restaurants nationwide under 15 leading brands. The group assesses business proposals from time to time, and neither confirms nor denies reports about its business policy."

Published by Globes, Israel business news - en.globes.co.il - on November 18, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

Pret a Manger branch / Photo: Shutterstock, Shutterstock.com
Pret a Manger branch / Photo: Shutterstock, Shutterstock.com
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