Continued income inequality should pave the way for regional pricing across the UK’s foodservice market

19th March 2018 (Last Updated March 19th, 2018 11:12)

This month, international sandwich shop Pret a Manger submitted a planning application to Hull City Council to open its first outlet in the city. Whilst this in itself is only mildly interesting, it could potentially create headaches for the company by raising awareness of its (and others) current flat pricing strategy.

Continued income inequality should pave the way for regional pricing across the UK’s foodservice market

This month, international sandwich shop Pret a Manger submitted a planning application to Hull City Council to open its first outlet in the city. Whilst this in itself is only mildly interesting, it could potentially create headaches for the company by raising awareness of its (and others) current flat pricing strategy.

In its 2016 financial report Pret a Manger reported that its employees had given away 1.7 million free coffees through its “random acts of kindness” scheme. However, its nationwide flat pricing strategy stands in contrast.

Regardless of a city’s standards of living, GDP or unemployment rate, Pret a Manger products carry the exact same price tag. Think tank Centre for Cities reported average weekly workplace earnings in Hull to have been £465.70 in 2017. The price of a Pret ham & egg baguette in Hull? £2.99. In contrast, Centre for Cities found weekly workplace earnings in London to be 56% higher at £726.70. The price of that very same ham and egg baguette in London? £2.99.

Whilst the pricing is fair in the sense that no one pays more or less than anyone else, those living in lower income cities pay a much higher proportion of their income for that baguette. With operating expenses such as rent and staff salaries being considerably cheaper outside of the capital, it could be argued that Pret a Manger’s attempt to offer universal pricing has created a scenario whereby those in lower income cities are effectively subsidising the sandwiches of high earning Londoners. Rightly or wrongly, people often hold an expectation of those earning above average wealth to contribute more.

It’s worth noting that Pret a Manger is not alone in this. The country’s leading supermarkets including Tesco, Sainsbury’s and Morrisons all offer lunchtime ‘meal deals’ for the same flat price across the country. Boots is one of the few exceptions, charging an extra 60p in London branches.

As considerable income disparities continue to exist between the North and South of the UK, expect regional pricing to potentially become a hot topic across foodservices.