Big vision, small steps for offshore success

The launch of a UK sandwich chain in New York provides lessons for Kiwi exporters. 

The long-planned opening day of UK-based, international sandwich chain Pret a Manger’s first overseas store in the heart of New York’s financial district nearly didn’t happen because of one small oversight.

The New York fire brigade almost closed them down on opening day because the shop hadn’t displayed its fire certificate in the right place, says Morag McCay, an international business development director, NZTE beachhead advisor and Pret a Manger’s former group commercial director. “We had it up on the wall in the manager’s office, not on the wall inside the shop.”

Having a bunch of none-too-happy, fully-uniformed New York Fire Brigade guys in Pret’s first US store on opening day was quite something, admits McCay, but it was also a headache they could have done without. 

Taking your first steps offshore is not a decision any business should take lightly, says McCay, who returned to New Zealand two years ago after more than 28 years working in the UK and abroad. 

One of the biggest mistakes companies make when they take their first steps offshore is assuming things will be the same as where they’ve come from, she says. With Pret’s it was a lot of little things, like foods being called different names: rocket is arugula; prawns are shrimps; and tuna salad is just mayonnaise and tuna. “There’s no lettuce or anything green near a tuna salad in the US,” she laughs. Plus everything – fillings, sauces, brownies, slices and drinks – is much sweeter in the US.

McCay says they knew some of the idiosyncrasies, but were blown away by the depth of them when they got there. “On the surface it can all appear quite similar, especially when you’re speaking the same language. You have to be very wary about assuming things are the same because then you can get caught out.”

Pret’s didn’t have big profits sloshing around when it launched in New York – a market that was chosen as much for its foot traffic as its proximity to London – so it needed to get its first international launch right if it was going to attract investors with deep enough pockets to help it expand overseas. 

With a limited marketing budget, the company relied on PR and the novelty of its offering – bringing sandwiches to a market many consider the world’s sandwich capital – to get its name out there. It traded on its health credentials, unusual sandwich flavours, the friendliness of its staff (quite unique in New York’s fast food world, but also a hiring policy that caused far more problems than expected) and its charity work (Pret donates all leftover food daily to homeless charities). 

The launch was reasonably successful, but business tailed off rapidly as New York’s winter made cold sandwich offerings an unattractive lunch option. Pret’s team rapidly introduced a range of thick meal-soups to tempt back the shivering lunch crowd.

It’s all about being adaptable and walking in the shoes of your customers, says McCay. “You really need to feel what it’s like to be them. You can go over with a sense of what your brand is, but actually all that matters is how relevant it is to their lives.” And you can’t do that from the comfort of home, she adds. 

One of Pret’s two founders, the more financially and property-savvy one of the pair, Sinclair Beecham, based himself in New York for the better part of two years to ensure the launch was successful, says McCay. “The people who know the business best tend to be the ones who’ve built the business first time round, so generally they are the best ones to build it the second time around as they know the pitfalls.

“This is why I have huge sympathies for New Zealand businesses because they are generally small companies and their markets are generally a very long way away, so the challenges are not just financial, they are often highly personal.”

For any company thinking about taking its first steps offshore, you need a really big vision, says McCay. Pret’s didn’t go offshore to open one shop, but to expand globally. The company’s success in New York proved its model worked overseas, allowing it to attract a big investor at the right price, she says. “It’s got to be a big enough goal to be worth the effort. Think big and then test small, in a way that doesn’t ruin your entire business, because the risks are high.”