What is the change in value of your favourite (?) sandwich?
September 10, 2025
Did you see the rather entertaining article in the FT on Saturday https://on.ft.com/3VEIfIH about why a journalist can’t quit Pret, but also the more important article, arguably, on Monday on the write-down in its valuation https://on.ft.com/3JRFoK5?
There has also been chatter over the summer about another iconic UK brand, Costa Coffee, being written down by Coca Cola and put up for sale. Clearly this is only a rumour as the parties being discussed have refused to comment.
With Covid-19 apparently firmly behind us and speculation that we are all being sent back to the office full-time, it’s interesting that these two businesses are no longer appealing to their owners (purportedly!).
Is it the rise of the two Gs (Greggs and Gail’s) squeezing them from each end? More work is needed to understand the detail I think. (Perhaps one of you has a client in this space that needs valuing that would give my team the excuse to do the research 😊!).
More importantly, I like this easy-to-understand story about valuation change in business. Paying attention to macro-economic events is very important, but equally relevant is paying attention to industry change – who is up, who is down, who will be up, who will be down – as well as issues like which business model is achieving the best profit margins.
This type of analysis is catnip to my team. They forage for data to support the arguments they make about valuation from trade journals, industry reports, the internet and our network of industry experts.
(Coincidentally, just today we were talking to an ESG expert to get behind the noise on the topic caused by US domestic policy, to the actual facts of what is really happening).
The Evidence Collection sets up the Valuation Exercise and the better it is done and the more comprehensive it is, the better the valuation will be.
Would you like to jump on a Teams so we can show you what we mean by the Evidence Collection we undertake? We would love to show you if you have time.
Or would it help for us to pop into your office to give you a quick demonstration? We could do it in 20 minutes if you are interested?
In the meantime, personally I can see why Pret may be facing challenges. I tend to turn left or right rather than go in myself (saving only for a cinnamon crown occasionally!). If the customers are leaving, obviously the profits will fall, and as night follows day the present value will drop, but also the chance of future value creation will diminish.
Maybe things will start looking up for Pret. If so the value will rise again. I always want businesses large or small to thrive so I wish the leadership team well. Maybe next year I will be able to bake a set of arguments to justify its remarkable recovery in value.
In the meantime, if you want to have a coffee I will happily host you in Pret, Costa, Gail’s, Greggs or an independent coffee shop of your choice. Just state your preference and I will reserve a table!
