Pret a Manger axes 2,800 roles from its coffee and sandwich bars

Coffee and sandwich chain Pret a Manger has axed 2,800 roles from its shops as the coronavirus crisis continues to hammer UK plc. 

In a statement released today, Pret chief executive Pano Christou said the coronavirus pandemic ‘has taken away almost a decade of growth at Pret’.

He added that the popular cafe franchise had ‘managed to protect many jobs’ and  said he is ‘gutted that we’ve had to lose so many colleagues’. 

It comes after a survey by the Confederation of British Industry found that UK retailers have cut jobs at the fastest rate since the financial crisis in 2009.

Mr Christou said: ‘I’m gutted that we’ve had to lose so many colleagues. Although we’re now starting to see a steady but slow recovery, the pandemic has taken away almost a decade of growth at Pret.

‘We’ve managed to protect many jobs by making changes to the way we run our shops and the hours we ask team members to work.

‘I’m hopeful we’ll be able to review all these changes now that trade is improving again, and I’m encouraged by the improvements we’re seeing every week. We’ll soon be announcing a number of big changes to help bring Pret to more people.

‘We’re grateful to the Government for the support they’ve given our sector, and hope that support will continue as long as possible to give Pret time to adjust.’  

Though there have been ‘clear signs of recovery’ in footfall since the lockdown was eased, trade across Pret’s shops is still around 60 per cent down year-on-year. 

A report by the CBI found the employment balance, which measures the number of retailers laying off and hiring staff over the past year, had dropped to minus 45 per cent in August from minus 20 per cent in May.

The figures, which are the lowest level the country has seen since February 2009, also revealed an unexpected slump in retail sales in August with its balance falling to minus 6 per cent from 4 per cent in July. 

It was revealed that the retail bloodbath has claimed or put under threat at least 41,391 UK jobs since the lockdown was introduced in late March.   

It follows mounting warnings of mass unemployment when the Government’s worker furlough scheme comes to an end in October. 

The retail sector is among those which have leaned heavily on the scheme since lockdown forced vast swathes of the high street to shut.

Non-essential shops have been able to re-open since June, but many retailers have had to close shops and cut staff as shoppers continue to shun the high street.  

Marks & Spencer added to the pain in the retail sector, announcing 7,000 job losses last week.

The London-based retail giant revealed the bulk of the cuts would be made across its stores, hitting around 12 per cent of its 60,000 shop-based staff, as well as a smaller number of support centre and regional management workers.

M&S, which employs 85,000 people worldwide, said it expected a ‘significant’ number of roles would be cut through voluntary departures and early retirement. 

Alpesh Paleja, lead economist at the CBI, said: ‘The furlough scheme has proved effective at insulating workers and businesses in some of the worst-hit sectors during the pandemic, but these findings reinforce fears that many job losses have been delayed rather than avoided.’

He added: ‘Trading conditions for the retail sector remain tough, even against the backdrop of business slowly returning.

‘Firms will be wary of deteriorating household incomes and the risk of further local lockdowns potentially hitting them in the pocket for a second time.’ 

The survey also found that retailers polled for the report expect job losses to fall further, with a balance of minus 52 per cent for the next quarter. 

They also showed that retailers expect sales to fall further in September, with a balance of minus 17 per cent.

But official figures offered some good news for the embattled retail sector last week, revealing total retail sales volumes in July rose 3.6 per cent compared with June and are now 3 per cent above pre-pandemic levels.

More than 187,000 people across a range of industries now face redundancy, or have already been laid off, in recent months as the pandemic puts a huge dent in the nation’s economy. 

This month it was revealed that Debenhams was set to axe 2,500 jobs across its stores and warehouses in an attempt to cut costs after sales plummeted during the coronavirus lockdown.

It was also revealed that around 14,000 jobs could also be on the brink at Debenhams, with plans to liquidate the business being drawn up in case other options for saving the company – such as selling it – fall through.

The department store is scrapping the roles of sales manager, visual merchandise manager and selling support manager as part of a management restructuring process.

The move, which was first reported by RetailWeek, comes four months after Debenhams collapsed into administration.  

Meanwhile it was reported that 1,300 jobs at the British retail giant John Lewis had been affected this month after eight retail sites announced in July they were at risk of closure.

The retailer said the affected stores were ‘already financially challenged prior to the pandemic and a number of contributing factors, including the shift towards online shopping which Covid-19 has accelerated, meant these shops would not be commercially viable in the future’.   

In a statement, the business said: ‘This is a very sad occasion and one we never thought was imaginable when we first opened these shops.

‘Our expectation was that we would trade in these locations for many years to come, but they were financially challenged before the pandemic and we have not been able to find a way that would allow us to turn that around.

‘We are grateful to those who have expressed their support since announcing the proposed closure last month, and for the incredible professionalism our partners have shown – they remain our absolute priority and will be fully supported over the coming weeks.’

Earlier this year more than 1,800 jobs were lost at Oasis and Warehouse after administrators said they were unable to rescue the company behind the brands.  

In a statement the Joint administrator at Deloitte, Rob Harding, blamed coronavirus for the stores’ demise and said: ‘Covid-19 has presented extraordinary challenges which have devastated the retail industry.

‘It is with great sadness that we have to announce a sale of the business has not been possible and that we are announcing so many redundancies today.’

It comes as the Office for National Statistics said 730,000 people have been taken off payrolls since the beginning of the crisis in March, and predicted some 6.5 million jobs in total will go in the UK because of the disaster. 

Government figures also reveal 6.1 cent of the UK working population have changed occupations in the three months after the pandemic hit. 

Statisticians said that most people who changed jobs in the quarter after the pandemic hit also changed their industry, as large parts of the economy shut down temporarily. 

The Government’s furlough scheme for workers comes to an end in October and while it has launched the back to work bonus, offering firms £1,000 for every furloughed staff member a business retains, there are fears there will still be thousands more retail jobs axed.     

Retail sales surged above pre-pandemic levels in July but clothes buying remains slow and the jobs bloodbath in the sector continues

By Jane Denton for ThisisMoney 

Britons are flocking to non-essential shops post-lockdown with retail sales rising to pre-pandemic levels last month, figures show.

Prime Minister Boris Johnson said it is ‘hugely encouraging’ to see Britons boosting businesses as footfall across all retail locations is at 68 per cent of its level this time last year. This is compared to around 10 per cent at the start of April.

Of all UK businesses, 93 per cent have now reopened their doors to eager customers, figures from the Office for National Statistics have shown. 

Retail sales volumes have swelled by 3.6 per cent between June and July which is 3 per cent higher than levels seen in February.

But, in a sign of how hard enforced temporary closures hit certain shops, clothing sales remained down over a quarter against those in February. 

The retail sector is also at the heart of wide-spread job cull with high-street stalwart Marks & Spencer this week confirming it plans to axe 7,000 staff in three months.

It adds to 1,300 job losses at John Lewis and Boots’ plan to axe 4,000 roles, while WH Smith has said 1,500 jobs are at risk as it battles to lure in shoppers to its stores again.  

Some 90 per cent of drivers are venturing out again with the same number of small commercial vehicles – such as white vans – on Britain’s roads as before the pandemic hit. 

One in ten businesses paused or currently trading said their risk of insolvency was ‘moderate’ with just 1 per cent saying it was ‘severe’. 

Around 30 per cent said there was no risk of their company going under while 45.4 per cent said there was low risk. 

Some 11 per cent of companies said their turnover decreased by more than 50 per cent during lockdown, while 17 per cent said they lost between 20 and 50. 

Meanwhile, 32 per cent said their turnover was not affected at all.

ONS Head of Faster Indicators Chloe Gibbs said: ‘While just over half of trading businesses said their turnover had decreased compared to normal, just a sixth of all businesses currently trading reported their operating costs were outstripping income.

‘New data on company creations show that although at the height of the pandemic the level of new incorporations were lower than normal, they have since bounced back to exceed levels usually seen at this time of year, possibly as individuals set up new small companies.

‘Closures were also lower than usual in recent months, as financial support measures may have helped some struggling companies.’

A No. 10 spokesperson told The Sun: ‘This data shows our economy and society have reopened successfully — and it is hugely encouraging this has happened without a resurgence in the virus.’

With many shoppers now having to wear a face covering and adhere to social distancing guidelines when browsing in stores, many retailers remain fearful that in-store footfall will take a considerable amount of time to fully recover – and some are not sure it ever will. 

Fitting rooms also remain closed, meaning many in-store shoppers could end up having to return clothes once they take them home and discover they do not fit.

In some instances, however, the pandemic has simply exacerbated pre-existing problems faced by many bricks and mortar based retailers, namely competition from online rivals ans dwindling profits and footfall. 

July’s rise in retail sales was not as pronounced as the previous two months. In May, sales increased by 12 per cent, while in June, they swelled by 13.9 per cent.

Sales in clothing shops grew by 11.9 per cent last month, while online shopping sales slipped by 7 per cent, the Office for National Statistics said today.

Ruth Gregory, senior UK economist at Capital Economics, said the figures suggested that ‘the recovery in physical shops was more impressive than the headline figure and that shoppers are starting to return to the High Street.’

But, Helen Dickinson, chief executive of the British Retail Consortium, said: ‘The survival of many retail businesses hangs in the balance. 

‘Some retailers haven’t been able to pay their rent for the period where they were required to close for our national benefit and numbers of job losses and shop closures are rising. 

‘Unless another viable solution is found, the Government should extend the moratorium on aggressive landlord debt enforcement beyond September.’

In July, the volume of food store sales and non-store retailing remained at ‘high sales levels’, despite monthly contractions in these sectors at -3.1 per cent and -2.1 per cent respectively.

Last month, fuel sales also continued to recover from low sales levels but were still 11.7 per cent lower than February.

The ONS said: ‘Recent analysis shows that car road traffic in July was around 17 percentage points lower compared with the first week in February, according to data from the Department for Transport.’

While elements of the ONS’ latest retail figures for July are upbeat, many analysts remain cautious about the sector’s future prospects.

Jeremy Thomson-Cook, chief economist at Equals Money, said: says: ‘Despite the rebound, we have doubts over the sustainability of wider consumer spending given the closure of the furlough scheme in October and the chances of a second wave of Covid-19 limiting access to some facets of the retail environment once again through winter. 

‘We hope that this summer has not been the High Street’s Christmas.’ 

Meanwhile, the EY Item Club thinks Britain’s economy is on track to rise over 12 per cent quarter-on-quarter in the third quarter, buoyed by Chancellor Rishi Sunak’s popular ‘Eat Out to Help Out’ dining scheme.

But, beyond the third quarter, the EY Item Club is less optimistic about the country’s prospects for an economic recovery and a continued revival in the retail sector.

Howard Archer, chief economist at the EY Item Club, said: Consumers are highly likely to adopt a cautious approach to major discretionary purchases given the uncertain economic environment. 

‘Consumer confidence currently remains at a relatively low level despite coming off recent long-term lows. On top of this, ongoing concerns over the possibility of a rise in coronavirus cases could magnify consumer caution, which may limit future shopper footfall in the short term.’

The EY Item Club thinks the unemployment rate could rise to around 8.5 per cent at the turn of the year, compared to the latest rate of 3.9 per cent in the three months to June. 

Meanwhile, Jo Causon, chief executive of Institute of Customer Service, has warned that ‘we cannot be complacent about the situation faced by retailers and consumers alike.’

She added: ‘Rising retail spending masks the fact that the cost of providing effective service has risen considerably, from reduced restaurant capacity to additional staff costs. 

‘As our most recent customer service index shows, even those at the top are struggling to show improvement in light of ongoing restrictions. While all of us are feeling the pinch, we can each do our bit by targeting our spending toward the outlets we most value in our lives and our communities.’

Earlier this month, a group of top retail bosses warned that London’s Oxford Street could be boarded up within a year unless the Government takes radical action.

It is understood that lobby groups have warned Government Ministers that 200 of London’s top shops will close over the next 12 months unless more action is taken to aid the sector. 

Bosses said the Government needs to draw up a more nuanced tax regime to allow for the changing landscape of demand and replace business rates – a property tax which amounts to about half the rent costs of a store.  

Meanwhile, UK industry has reported the fastest growth in almost seven years after being boosted by further easing of lockdown restrictions but companies are still rapidly shedding jobs, according to new data.

The IHS Markit/CIPS Flash UK composite purchasing managers’ index (PMI), a closely watched measure, hit 60.3 in August, from a reading of 57.1 in July.

Everything above 50 is considered growth.

The reading represents the fastest growth in private sector output since October 2013 and surpassed analysts’ expectations of 56.7.

Accelerated growth was driven by improvements in the manufacturing and service sectors since July, the survey said.

It reported flash readings of 61.6 for the manufacturing sector and 60.1 for the services sector.

Higher levels of private sector output were largely attributed to the reopening of large parts of the economy in July and August, resulting in a jump in business and consumer spending.

Tim Moore, economics director at IHS Markit, said: ‘The combined expansion of UK private sector output was the fastest for almost seven years, following sharp improvements in business and consumer spending from the lows seen in April.

‘There were encouraging signs that customer-facing service providers have started to catch up with the rebound seen earlier this summer across the wider economy, with easing lockdown measures, staycations and the Eat Out To Help Out scheme all reported as factors supporting growth in August.’

Total volumes of new work expanded for the second month running, with the latest increase the fastest since July 2014, it said.

However, the figures also revealed that concerns about the speed and duration of the recovery resulted in sustained job cuts across the private sector.

Employment declined at an accelerated rate with lower payroll numbers driven by redundancy programmes as firms sought to reduce overheads ahead of the end of the furlough programme. 

The slow return of the high street: Official footfall figures show town centres are rebounding more slowly than shopping malls and more than one in 10 workers is STILL on furlough leave

By David Wilcock, Whitehall Correspondent for MailOnline

Britain’s high streets are rebounding at a slower rate than shopping centres, according to new figures which show how the reluctance of staff to return to workplaces is harming businesses.

Footfall in town and city centre streets has stagnated in recent weeks, figures from the Office for National Statistics (ONS) revealed this morning. 

At the same time out-of town retail parks and urban shopping centres have continued to slowly move back towards their original footfall.

The ONS release also showed that 13 per cent of workers is still on paid furlough under the Job Retention Scheme (JRS), with almost one in four (39 per cent) of companies topping up their wages.

It came as Boris Johnson was told to do more to get office workers back at their desks.

Carolyn Fairbairn warned today that commercial centres risk being permanent ‘ghost towns’.

Writing in the Daily Mail, the director-general of the CBI said getting staff back into offices and workplaces is as important as the return of pupils to school.

‘The UK’s offices are vital drivers of our economy,’ says Dame Carolyn, who speaks for almost 200,000 firms. ‘They support thousands of local firms, from dry cleaners to sandwich bars. They help train and develop young people. And they foster better work and productivity for many kinds of business.

‘The costs of office closure are becoming clearer by the day. Some of our busiest city centres resemble ghost towns, missing the usual bustle of passing trade. This comes at a high price for local businesses, jobs and communities.’

Dame Carolyn’s intervention will pressure the Prime Minister to match his rhetoric on the need to return to school with similar words – and action – about workplaces.

The ONS measured footfall compared with the same day of the week in 2019.

‘Seven-day average continued to increase in the latest week (17 to 23 August 2020), to around 70 per cent of the level on the same day a year ago, driven by increased footfall at retail parks and shopping centres,’ it noted.

‘This continues the gradual increase in footfall seen since the reopening of non-essential shops and businesses in England on 15 June.’

But more worrying for smaller retailers found on high streets, it added: ‘Footfall on high streets has remained stable over the last few weeks.’

In the week beginning August 17, footfall in retail parks increasing to 90 per cent of the same day in 2019, and shopping centres to just under 70 per cent.

DAME CAROLYN FAIRBAIRN: Ghost town Britain HAS to get back to work and Boris Johnson must lead the way

Decisions taken over the next few weeks will shape our economy for a decade. 

Getting schools back is an essential component. But as important will be building the right environment to get people back into offices and workplaces.

The UK’s offices are vital drivers of our economy. They support thousands of local firms, from drycleaners to sandwich bars. They help train and develop young people. And they foster better work and productivity for many kinds of business.

The costs of office closure are becoming clearer by the day. Some of our busiest city centres resemble ghost towns, missing the usual bustle of passing trade. This comes at a high price for local businesses, jobs and communities.

Remote working has been a resounding success for many firms and employees, and none of these benefits should be lost. Many people have never worked harder, keeping businesses afloat from their desks and kitchen tables. 

Flexible working is here to stay and needs to remain an option for many. But there are serious downsides too. 

For young people, learning face-to-face in the workplace is an unbeatable way to build skills and confidence.  We must not deprive the next generation of this opportunity. 

Not everyone has the space to work effectively at home – an ironing board in the bedroom does not make a great workspace. And the mental health challenges triggered by isolation are all too real for many.

There is also the question of fairness. Many employees, from barbers to brewers, have no option to work from home. 

We don’t want to see a new divide in our society – between those who can and can’t work from the safety and comfort of their homes.

For all these reasons we need more people to feel it is safe and possible to go back into their places of work. 

This is why we are today calling on the Prime Minister and his Government to do more to build confidence around getting people back into offices and workplaces.

Getting schools open safely is a vital first step to enable parents to go back to work, but they must stay open wherever possible. 

This means effective test and trace, and a focus on resilience. We need government, nationally and locally, to do much more to build confidence in public transport.

They need to shout louder about safety measures in place, enforce the wearing of face masks on tubes, buses and trains, and support the introduction of flexible season tickets so people can return gradually without financial penalty.

And we urgently need mass widespread testing – including in the workplace – to help people feel confident and safe. 

We welcome the Health Secretary’s recent commitment to a mass testing strategy for 2021.

More flexible working is indisputably a good thing for our economy and quality of life, but we must have a balance. 

It’s time for the UK to bring its workplaces back to life, or we will look back with regret at the jobs lost, training missed, and communities harmed.We ask the Government to work with business to build confidence in returning to offices, starting now.