The founder of Pret A Manger believes his Asian-inspired food business Itsu will soon be bigger than the ubiquitous sandwich chain, as he bets on appetite from health-conscious consumers and international growth.
Julian Metcalfe said overtaking Pret, which he co-founded with friend Sinclair Beecham in 1986, had long been “one of my ambitions” for Itsu, which was launched a decade later to sell sushi to office workers seeking a more nutritious lunch.
“In five years, we’ll definitely be much, much bigger than Pret A Manger because we’ll have a really fast-growing relationship with customers and no one else can supply the sort of food that we do,” Metcalfe, who sold his final stake in Pret in 2018, told the Financial Times.
He also took a swipe at his former company, saying Pret, where a chicken and bacon baguette costs £5.50, was “expensive”, and that Itsu was the only brand providing “good, nutritious, affordable food” to UK consumers. Its small rice bowls start from £4.99, with frozen soup dumplings available at Tesco for £3.
Metcalfe’s bullish comments underscore the appetite of ambitious food businesses to grab a bigger slice of the UK lunchtime market, amid growth of fast-food chains and the return of office workers after the pandemic.
New brands, from burger to salads chains, and fried chicken and Asian outlets, have pushed expansion to take advantage of growing fast-food demand. The UK market is set to generate revenues of more than £19bn this year, up 3.8 per cent from in 2024 and exceeding the overall growth of 2.4 per cent for the wider food service sector, according to the Future Foodservice consultancy.
Yet most analysts viewed Metcalfe’s ambition to take on Pret as overly optimistic, given the strong presence of the sandwich shop in cities across the UK.
“Comparing Itsu to Pret A Manger feels a bit of a red herring,” said Clive Black, head of research at Shore Capital. “It would require quite an enormous organic store opening programme or an acquisition of a significant number of stores, or a collapse of Pret sales.”
Itsu has 83 UK stores, heavily concentrated in London, a fraction of Pret’s 493 shops across the country. Itsu’s 2023 sales were £164mn, up 16 per cent year on year, well short of Pret’s worldwide sales of £1.1bn.
Internationally, Itsu has three stores in Brussels and Paris, compared with Pret’s more than 200 sites in Europe, the US and Asia. Pret’s first opening in South Africa this month will be its 20th international market.
Simon Stenning, the founder of Future Foodservice and a former Pret executive who worked alongside Metcalfe, said he too was “sceptical” of his ex-boss’s plans.
“The reality is that the Pret offer is more mainstream, more widely accepted than sushi,” said Stenning. “Expanding on to every high street like Pret is going to be very challenging.”
Metcalfe’s prediction is for Itsu’s sales to overtake those at Pret by 2030, as the company plans to more than triple UK outlet numbers to 300 and expand its supermarket sales channel globally.
He said he was looking for franchise partners in countries such as Italy, Spain and Germany, to open hundreds of stores in the continent in the next decade.
The founder, which owns about 60 per cent of Itsu, also said he was on the hunt for a “global food manufacturer” to buy the company in about 2029, which was “a time when we do need a global reach”.
Itsu chief executive Clive Schlee has about a 10 per cent stake, with the rest owned by Bridgepoint.
Itsu, which started as a conveyor belt sushi shop and expanded into takeaway, has cut its choices in raw fish and other cold food to increase hot meals such as dumplings, baos and noodles.
“Itsu is pivoting towards hot dishes as people view hot dishes as value for money,” said Maggie Davis, insight manager at Lumina Intelligence.
She said changes in how consumers viewed healthy food — from low- calorie, vegan and vegetarian food to those beneficial to gut health, with an emphasis on fibre and protein — had created a desire for “health without compromising on taste”, and Itsu had been a frontrunner of this trend with its “eat beautiful” branding.
Pret declined to comment. The group hit its 2021 target of doubling the size of the business by 2026 — three years ahead of schedule.
Ultimately, Itsu’s growth plan will be driven more by the supermarket business, as Metcalfe predicted the segment would surpass the restaurant business next year. In 2023, Itsu Grocery generated 30 per cent of group sales at £48mn.
“The high streets, especially staff costs, are so expensive,” said Metcalfe, and they would only rise further from April when an increase in employers’ national insurance contributions kicks in.
In its grocery division, with its 90 products, “we’re in 110,000 places and soon we’ll be 200,000, so that’s why grocery got such potential. People take home gyoza, baos or the soup dumplings that are very affordable,” he said. Itsu products are in major UK supermarkets and available in the Netherlands, Ireland and Spain, with an expansion planned in the US next year.
Analysts say the grocery offering was an advantage over Pret, which sells limited products such as frozen croissants. But Shore Capital’s Black said fighting for supermarket shelves meant an “awful lot of competition” with retailers’ private labels, especially on high-margin chilled products.
Black also flagged the related risk of increasingly cost-conscious customers switching away from eating out to buying more from supermarkets.
He questioned whether Metcalfe’s view was “a sign of great growth ambition, or if it’s actually a sign of maturity in the food and beverage market”.
