Pret triangle sandwich

What the Pret Index Told Us About the Economic Recovery

In May 2021, as Covid-19 cases in Europe and the US receded and citizens began emerging from pandemic-induced lockdowns, Bloomberg set out to track the economy’s return to normality using transactions at Pret A Manger Ltd.

Because the coffee and sandwich chain is closely associated with the lunch hour in the financial districts of London and New York, Bloomberg’s Pret Index – which benchmarked weekly transactions against what they were before the outbreak of Covid-19 – showed whether hundreds of thousands of bankers, asset managers and corporate lawyers were repopulating those areas as firms recalled workers to the office.

Click here for details on the methodology.

Pret’s cafes in UK airport terminals and train stations also showed how quickly leisure, business and commuting travel rebounded across the country, while data from Hong Kong and Paris offered an insight into how other different reopening policies across those business hubs stacked up against reopenings in London and New York.

With many clusters now returning to normal or at a plateau, Bloomberg has summarized its key findings since May 2021 below. The data will still be updated every week on the Bloomberg Terminal, which clients can access using the function ALLX PRET. In the UK, the Pret Index is also being reproduced by the Office for National Statistics and available here.

Pret coffee

In March 2021, transactions in London’s City and Canary Wharf financial districts were less than a third of what they were before the pandemic with many headlines stating that the traditional office model was “dead.” That month, the UK government began a phased reopening of the economy, and financial companies called workers back to the offices after stay-at-home orders ended. But it was slow going at first.

The vast majority of banks, asset managers and corporate law firms offered their employees a hybrid working week split between home and the office, with some requiring staff to only commute into their workplaces between two to three times a week. That changed way of working saw some employers remodel their offices to plan for fewer workers coming in on a daily basis, and add more meeting rooms and communal areas to foster in-person collaboration when they did show up.

The repopulation of the Square Mile and Canary Wharf continued throughout the summer and fall, with Pret’s transactions in the areas reaching a 2021 peak in late November at 88% of pre-pandemic levels. The subsequent resurgence of the virus with the highly contagious omicron subvariant fueled a crash in sales as more people opted to work from home again through most of December and January.

By February, transactions were back in growth as the wave of infections subsided and ultimately peaked in May at 89% of normal levels–a milestone that hasn’t been matched since. Pret Chief Executive Officer Pano Christou has said that it could take years for the areas to return to previous performance due to a permanently changed office habits and as fresh waves of covid infections fueled by subvariants keep people off sick and working from home.

London’s West End arts, entertainment and shopping district was ahead in its recovery compared to the capital’s financial districts in March 2021 as Londoners felt more comfortable venturing out for leisure than returning to the office. Sales were already at the halfway-back mark that month.

Visits to Pret cafes in the area climbed throughout the summer as residents and tourists embarked on so-called “revenge-spending” sprees with savings they had accumulated during lockdowns. By October, sales had climbed past what they were before Covid in a sign that London’s retail industry was making a strong recovery.

As in most office-centric areas, transactions fell in December and January due to a wave of new infections. At the time of print, they’ve recovered to just a fraction below normal levels.

Pret CEO Christou has said that the strength of Pret’s sales in airports is one of the reopening trends that has surprised him the most.

In early 2021, Pret’s business in London’s Heathrow, Gatwick, City and Luton airport terminals was about a tenth of what it was before the pandemic. As flight routes reopened, demand soared, even as several of the UK’s largest airlines including British Airways, EasyJet and Wizz Air struggled to serve customers, having dramatically cut their staffing levels during lockdowns.

Transactions have climbed consistently ever since. The most recent data show sales are 40% above what they were before the pandemic, indicating that airports are still teeming with scores of passengers despite thousands of airline routes being canceled.

New York, a city once famous for its punishing office work hours, has been stubbornly slow to recover from the pandemic.

In the cluster that includes Wall Street and Tribeca, Pret’s sales were about a quarter of normal levels in March 2021, and while Wall Street leaders insisted that Covid wouldn’t usurp their workplace culture, Christou pegged a recovery at between three to six months behind London’s.

But that bounceback hasn’t materialized, with many New Yorkers not wanting to commute to the office as often as they once did and serial waves of infections prompting workers to work from home. New York City is currently facing its sixth wave fueled by omicron subvariants, which pushed authorities to reissue mask-wearing guidelines indoors earlier in July.

Transactions in New York’s Midtown entertainment and business district, as in London’s comparable West End, have recovered faster than more office-centric areas as residents and tourists more readily venture into the city to shop and dine.

Sales climbed past the halfway-back mark last July before peaking in November at 72% of normal levels. At the time of print, they’re below the halfway-back mark in a potentially bearish sign for the city’s retail economy.

Pret wrap sandwich

As with other major cities in Europe, Pret’s business in Paris also climbed back to near-normal levels through last spring and summer, with the notable exception of August, when residents often spend less time in the city.

Transactions were below the halfway-back mark during that time before steadily climbing over the past 12 months and have now returned to just below normal trading.

Pret’s sales in London’s suburban areas have been among the most resilient. The hybrid model of working part of the time from the office and part of the time from home made Pret’s stores outside London’s center early winners as performance sagged in the capital’s financial districts.

In March 2021, when Pret’s transactions were less than a third of normal levels in the capital’s banking hubs, they were already at 80% of a full recovery in London’s suburbs. That trend has also galvanized the real estate market outside London’s center as buyers sought bigger homes with outdoor spaces during the pandemic over smaller apartments downtown.

Sales peaked at a third higher than pre-pandemic levels in March of this year. At the time of print, they’re about a quarter higher than before the crisis–a level they’ve stayed at for several weeks.

Transactions in London train stations have gradually recovered as the rail arteries feeding the capital’s financial districts, shopping areas and commuter towns in the home counties carried more and more passengers with each phase of the economy reopening.

Pret’s sales at stations surpassed pre-pandemic levels for the first time this April and at the time of print are still higher than they were before Covid.

Transactions in Hong Kong started out being the strongest of any major global business hub Pret operates in. They were about 80% of pre-pandemic levels in March 2021 and reached a peak last July at 85%.

But earlier this year, sales began to contract, as anticipated by Christou, due to the lower rate of vaccinations among adults compared with other major cities. The lockdowns brought on by the territory’s zero-Covid strategy have also hampered the casual dining and wider retail economies.

At the time of print, sales were just under two-thirds of normal levels.

Pret sandwich

As people looked for signs that the world was getting back to normal, Pret provided weekly data to Bloomberg about its sales across major business hubs on an exclusive basis. The figures gave a global perspective on whether demand for breakfast and lunch items returned to shopping centers, financial districts and airports.

The Pret Index is calculated against a baseline from January 2020, before the pandemic upended the cities tracked, and compares transaction data starting from March 8 against the average from that month. Every point (.01) on the index represents 1% progress toward returning to those January 2020 levels.

Sandwich sales are an imperfect measure, but the figures compiled by Pret provide at least one real-time gauge of the cities’ recovery.