As the restaurant industry aims to figure out how to use subscriptions to drive loyalty, some are finding that offering free menu items is not particularly cost effective, instead shifting to discounting models.
In the United Kingdom, coffee chain Pret a Manger has reportedly drawn ire from its Club Pret subscribers, per publications such as BBC and The Guardian, after shifting away from providing up to five free daily drinks and 20% off food for 30 pounds a month to simply offering up to five half-priced daily drinks for 10 pounds a month. It remains to be seen whether the brand will do the same with its U.S. Club Pret program.
The sandwich and coffee shop is not the only restaurant chain to leverage a discount-based subscription model, rather than eating (as it were) the cost of daily giveaways. Sweetgreen, for instance, charges $10 a month for its Sweetpass+ membership, which provides a daily discount of $3 off an order.
Smaller brands are also exploring discounting subscription models. For instance, San Francisco wine bar El Lopo’s monthly “Take-Care-of-Me Club” subscriptions have consumers pay a set amount (one tier, for instance, is $89) and are rewarded with restaurant credit of a greater value ($100).
“It’s certainly nice to have some predictable revenue,” owner Daniel Azarkman told PYMNTS last year. “I’d say it’s aside from that reliability, it’s … been a great way to just say who we are, and even a lot of people that don’t end up signing up for it do read through it, do ask questions about it and are still impressed that we are the kind of place that would run something like that.”
Brands that do still use freebie-based subscription models are tinkering with their offerings to make the economics work better for them. In 2022, Panera raised the price of its coffee subscription, adding more beverages to the offering, perhaps in an effort to make the change more palatable to its customers.
Taco Bell, for its part, occasionally offers 30-day subscriptions, or “Passes,” where consumers can get one free order of a given menu item per day. Its Nacho Fries Lover’s Pass has shown the brand how effective offering this deal for an item that is typically a side dish can be, as it drives orders to other parts of the menu.
“We … noticed that the average redemption check was higher than previous Pass iterations, likely due to Nacho Fries being a great side,” Dane Mathews, the brand’s chief digital and technology officer, told PYMNTS in an interview.
For restaurants, subscribers and those interested in subscriptions tend to be the most loyal customers by a considerable margin. PYMNTS Intelligence research finds that 17% of consumers who are not currently members of any restaurant subscription services are “very” or “extremely” interested subscribing in the future, and 42% are curious about them. Plus, the study found, roughly 8 in 10 restaurant subscribers and roughly 7 in 10 of those who are interested in these programs are very or extremely loyal to their preferred eateries, compared to less than half of those who are uninterested.
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