CAFE chain Pret a Manger can only pay a third of its rent after sales took a drastic hit during lockdown.
Sales have plunged to around a fifth and as a result the struggling food outlet has offered landlords only a small portion of what it owes them, reports the Financial Times.
Pret A Manger has so far opened 320 out of its 434 UK cafes
Most of Pret’s 434 UK outlets are placed near offices and in airports, serving up breakfast and lunch to workers and travellers.
But custom has dried up in many branches as the government asks those who can work from home to continue doing so for the foreseeable.
A video leaked on Monday suggested that Pret was preparing to axe jobs and now its chief executive Pano Christou has warned that the chain is currently in the “eye of the storm”.
The chain doesn’t expect beak even until at least September.
In a letter to landlords seen by the Financial Times, Mr Christou said: “We feel strongly that the Pret brand has every reason to believe it will thrive again, but we are currently in the eye of the storm.”
The chain initially closed all UK branches back in March when the government ordered all non-essential stores to shut up shop to stop the spread of Covid-19.
Gradually, it began reopening branches starting with cafes close to hospitals to cater for NHS staff. So far, it has reopened 320 outlets.
There are around 500 Pret cafes around the world, all of which have taken a significant hit in sales as a result of the pandemic, causing it to call for emergency funding from the bank.
It is now trialling a coffee delivery service by teaming up with Deliveroo as a way of generating revenue.
It comes as the Centre for Retail Research predicts that 20,000 shops could close for good this year, resulting in 235,000 job losses in the retail sector.
The pandemic has so far seen the collapse of Cath Kidston and Laura Ashley, while Debenhams has also been forced to call in administrators for the second time in 12 months.
Oasis and Warehouse have also turned into online only retailers caused by the sales slump after being snapped up by Boohoo.com.
Frankie & Benny’s has also announced that 125 diners won’t reopen after lockdown.
Pubs, bars and restaurants are also expected to run at a loss when they reopen from July 4 due to restriction on customer numbers necessary for social distancing.
Landlords and owners also fear that punters will stay away due to concerns over privacy – establishments are required to take contact details of customers to help NHS test and trace control any further outbreaks.
A Pret spokesperson told HOAR: “Although we are working hard to adapt Pret to the new retail environment, the coronavirus pandemic has massively affected our industry.
“Despite re-opening most of our shops, we are losing tens of millions of pounds each month and are not in a position to pay our June quarter rent in full.
“We are working with our landlords to find the best way forward.”