Meet the London sandwich king who has part sold to McDonalds

By DARIUS SANAI

LONDON - Julian Metcalfe is becoming annoyed. We are in a smart restaurant in Soho having ordered lunch 40 minutes ago. The waiter has been hovering with offers of more bread, more mineral water, another glass of chardonnay. But there is still no sign of our food.

"This is precisely, precisely what I was talking about when you asked me why I have done what I've done," he says, tapping a hand on the table. "I mean, who has an hour and a half spare to have lunch these days? Do you? Do I?"

Mr Metcalfe, the co-founder of Pret a Manger and the man as responsible as anyone else for changing the way most British office workers eat lunch over the past 15 years, is not someone who likes to dawdle. His mind is constantly in overdrive. "Is it value for money?" he says when the food finally arrives.

His lunch guests can be forgiven for not sharing concerns about his wallet. In January, he sold a third of Pret a Manger, the revolutionary sandwich-shop chain he co-founded with Sinclair Beecham in 1986, to McDonald's for £26 million ($90 million), in a deal that drew gasps across the chattering classes. Pret, with its displays of fresh food "always made on the premises today," is the antithesis of the American burger giant.

After 15 years of steady growth, it has a staff of more than 2000, an annual turnover of £100 million and 107 outlets.

Two years ago, McDonald's signalled its intention to diversify from burgers when it bought Aroma, the British coffee shop chain, for an estimated £10 million to £15 million. About the same time, it bought a minority stake in Chipotle Mexican Grill, a chain of 18 fast-food restaurants in Denver, Colorado.

But the Pret deal became a hot subject in the media.

A politically correct British success story had sold out to the symbol of faceless global greed. Was Mr Metcalfe surprised by the reaction?

"No, not really. I knew the press would have a field day. In this country the press love to knock a big American giant. McDonald's is seen as being brash and a bad employer of people. Quite why people think its attitude towards its staff is any worse than any big supermarket is a mystery to me."

Mr Metcalfe started Pret after meeting Mr Beecham at the Central London Polytechnic, where they were reading property law.

After unsatisfactory experiences with the greasy, packed sandwich bars that formed almost the only option for a quick lunch, they decided to start their own place.

The food was prepared and packaged at the beginning of each day - meaning fresh food with no queues. It was an instant success.

Mr Metcalfe's insistence on the finest-quality ingredients, and on keeping additives out, matched the early 90s' concern for healthy eating at a reasonable price. There have been suggestions that the money he and Mr Beecham made from the McDonald's deal has not been earmarked for global expansion, as initially announced. Was the deal perhaps Mr Metcalfe's initial step in graduating out of the sandwich trade as a multimillionaire?

"I could have retired to the Bahamas. But I don't want to. I need new challenges, and the overseas expansion we can now do after the deal is an incredible challenge.

"I have always said from day one I want to build Pret into a global company. I love the challenge of it." With the help of the Golden Arches, presumably.

"It took years for them to say they'd be happy with a minority interest. They wanted more. Big companies don't take minority interests in little companies. They buy them; it's much easier."

He says that if you reject the loose franchise model, as he does because he believes loss of control inevitably means loss of quality, expanding overseas is enormously difficult.

"We have to go in there and set up an operation ourselves, wherever we want to go," he says. He tried for years to move into Holland. "You can't sell food in Holland unless you have a licence and there's a closed shop for licences. The result is the worst food in Europe."

The first Pret in America, on Wall Street, opened last year and is doing as well as any of his shops in London, Mr Metcalfe says. "Considering we don't have a brand there it's very encouraging."

There are plans to open seven more New York stores this year. Casual visitors to Manhattan could be forgiven for thinking the last thing New York needs is another food outlet; it is a city where you can find an organic poppyseed smoked salmon bagel at four in the morning. So what was Pret's unique selling point in New York?

"They don't know about GM-free. It's true, they think GM is General Motors," says Mr Metcalfe. "But nobody offers chemical-free, preservative-free food, quickly, at our prices."

But why would a New Yorker prefer Pret's sandwiches, which look wimpy against the average Manhattan deli offering, to their own?

Because in New York you have to queue for 15 minutes for fresh-made food in delis, he says.

But is Pret still unique? Its Canary Wharf outlet in the reborn London Docklands is, for example, ringed by competitors and imitators.

"The major difference between Pret and all its competitors is we make our food right there and they don't," he says, a touch huffily.

Mr Metcalfe is known for his obsessive micromanagement of the sandwich-making process. This leaves the question how, if Pret's success is, in large part, down to his obsessive quality-control, can the formula be successfully extended to hundreds of shops around the world? "That's exactly the reason we did the McDonald's deal," he says.

"The last thing in the world they want to do is change us or screw about with our winning formula."

Even accepting the American company's undoubted expertise in dealing with different markets, how can they make sure the Pret quality is as good everywhere?

"Well, there are controls and training, aren't there," says Mr Metcalfe.

Apart from Pret's growing pains, Mr Metcalfe has another pressing concern on his hands.

This is the nurturing of his other baby, Itsu. The first Itsu opened in 1997 as a Japanese-style sushi bar, with food wafting past customers on a conveyor-belt.

There are now two Itsus in London, and Mr Metcalfe is taking his project overseas this year.

- INDEPENDENT