Pret A Manger may be more than three decades old, but the U.K.-based sandwich shop isn’t showing its age.
On Thursday, the company reported total sales for 2016 jumped 15% to 776.2 million British pounds ($996 million), with U.S. sales climbing 14% to leap over $200 million for the first time. Pret has notched consistent revenue growth for over a decade as it opens additional shops, generates more sales during breakfast and snacking times, and markets itself as a purveyor of “clean” foods—which is on trend with what many consumers say they want from their restaurants today.
“Pret is spreading in two different ways,” Pret A Manger CEO Clive Schlee told Fortune during an interview ahead of the results. “It is spreading in day part and also across the menu away from bread-based products.”
Founded in 1986 as a sandwich shop that focused on selling fresh foods to working Londoners, the chain has spread out internationally and now operates 444 shops across the United Kingdom, United States, France and other foreign markets. Pret anticipates it will open its 500th restaurant by the end of 2017.
Pret’s double-digit U.S. sales growth is particularly impressive because the American restaurant industry has been stung by declining traffic, especially during the lunch hour as younger consumers are opting for faster, cheaper alternatives like fresh fruit, yogurt, and chips. More Americans are also working from home and increasingly shopping online—two huge changes that are altering the frequency of restaurant visits for lunch.
One would think that Pret would be a prime victim of the move away from lunch: It started as a sandwich chain and also sells salads and other lunchtime fare. But the company says 59% of sales now fall outside of lunch hours, with growth particularly exciting for breakfast and snacking between the hours of 10 a.m. and 12 p.m. and 2 p.m. through the early evening. “Lunch is still king, and breakfast is a close queen,” Schlee says.
What helped Pret expand outside of lunch was an initiative to expand the menu, which became a keen focus for Schlee when he became CEO in 2003. Before that, he says Pret’s breakfast hours were “sad,” but in recent years, the company has added hot egg sandwiches and oatmeal and also spent a few years perfecting its coffee lineup.
Pret is also riding on the trend toward cleaner eating in markets like the U.S. and Western Europe, where consumers increasingly want ingredient lists devoid of artificial flavors and preservatives. That “clean” food movement has led rivals including Panera Bread (PNRA) and Chipotle Mexican Grill (CMG), to clean up their menus.
But Pret started as a preservative-free chain and has always remained that way. “We’ve never had to clean up,” said Schlee. “We started clean and we stayed clean.”
Like the rest of the restaurant industry, Pret does need to adapt to stay competitive. It recently launched a number of dairy-free offerings, including a soup range that’s both dairy and gluten free. The company is also experimenting with vegetarian-only shops they call Veggie Pret. The concept is already in the U.K. and may head to the U.S. down the road.
Pret’s strong showing in 2016 could set the stage for an initial public offering in the U.S. Reuters reported last month that private-equity firm Bridgepoint, which has controlled the company since 2008, had picked a financial advisor to help it weigh a potential stock market listing in New York, with an IPO as soon as the end of 2017.
