Wednesday 22 May 2019 12:00 pm

Pret A Manger eats Eat but vows to go veggie in new stores

Sandwich chain Pret A Manger said today it has agreed to buy rival British chain Eat.

Pret plans to convert as many of Eat’s shops as possible to Pret stores serving vegetarian food in response to what it said was a growing consumer demand for more vegan and vegetarian options on the high street.

Pret’s chief executive Clive Schlee said: “The purpose of this deal is to serve a growing demand of vegetarian and vegan customers who want delicious, high quality food and drink options.

Read more: Pret in talks to turn Eat stores into veggie diners

"We have been developing the Veggie Pret concept for over two years and we now have four hugely successful shops across London and Manchester. The acquisition of the Eat estate is a wonderful opportunity to turbo charge the development of Veggie Pret and put significant resources behind it.”

Pret experimented with a meat-free store at one of its branches in Soho in 2016.

After a successful month-long trial it opened its first permanent vegetarian shop in September 2016 and has since expanded the concept to three further locations in London and Manchester.

Pret did not disclose the terms of the deal.

The company said it would notify the Competition and Markets Authority about the transaction.

Pret was acquired by private equity firm JAB in May 2018 in a £1.5bn deal.

Eat, owned by private equity firm Horizon Capital since 2011, appointed corporate finance advisory firm Spayne Lindsay to explore a sale earlier this year amid tough competition in the sector.

Jonathan Buxton, head of consumer at Cavendish corporate finance, said: "With the vast majority of Eat’s 94 shops being based on London the deal represents a perfect opportunity to take advantage of a consumer shift that is found most prevalently in urban areas.

Read more: The City’s Pret employees celebrate bonus after JAB Holdings takeover

With Pret currently only having four stores branded as ‘Veggie Pret’, this acquisition will allow for a rapid expansion of the brand, which will allow them to access the growing trend for vegetarian and vegan food, without the need for a site by site roll out.

"This acquisition is likely welcome news to Eat which has been struggling with the growing competition in the sector, as shown by the loss before tax of £17.2m in the year to end of June 2018.

"This will certainly not be the last acquisition of this type as changes in customer demand continue to accelerate and pressure from higher rates, rent and wages causes a re-evaluation of outdated business models."