Restaurants are testing the waters with subscription models as consumers embrace monthly fees for streaming services, pet food, and household goods.
Restaurant chains like Panera and P.F. Chang’s, and local restaurants are experimenting with subscription services to increase customer traffic and revenue.
For instance, some restaurants offer free delivery or unlimited drinks for a monthly fee, while others provide favourite dishes for loyal customers.
In 2022, the average American had 6.7 subscriptions to Rocket Money, an app for personal finance. As a result, some restaurants are turning to subscriptions to keep customers returning for more.
Gravitas, a Michelin-starred restaurant in Washington, offers a three-course takeout meal for two as part of its Supper Club subscription, which costs $130 monthly. The club serves about 60 diners per month and helps to keep revenue flowing, as demand for takeout waned when the dining room reopened post-pandemic.
Other restaurants are also testing the idea of pre-paying for visits. With 26 members in its “Take-Care-Of-Me Club,” El Lopo in San Francisco offers $100 in dining credits for $89 or $200 for $175 per month. When members come in, El Lopo brings out their favourite dishes and offers a free drink to any bar patron during each visit.
Restaurants are moving in this direction to secure a stable monthly revenue flow and encourage customers to return regularly. For instance, P.F. Chang’s, the upscale Chinese chain, launched a subscription plan in September 2022, which provides members with free delivery and other benefits for $6.99 per month.
Although not all subscription programs are successful, many restaurants are expected to offer subscriptions in the coming years.
Subscriptions have become a standard practice for consumers, and regular monthly income helps restaurants manage their cash flow. Many more restaurants will follow the trend, predicts Rick Camac, Executive Director of Industry Relations at the Institute of Culinary Education.
Some restaurants have had to drop their subscription programs because they need more work. In late 2020, SheWolf, an upscale Italian restaurant in Detroit, launched a subscription service that included pasta, sauces, and other goodies for $80. However, preparing hundreds of boxes became too much work when the dining room fully reopened six months later.
Panera, meanwhile, saw nearly 40 million members in its loyalty program in early 2020 and encouraged more frequent visits. The restaurant launched a monthly subscription program with unlimited coffee and tea for $8.99.
The subscription increased traffic to the restaurant, with about one-third of customers buying food as well. Panera expanded the program to offer unlimited hot and cold drinks for $11.99 per month or $119.99 per year. Annual subscribers also receive free delivery.
Panera’s Chief Brand and Concept Officer, Eduardo Luz, reported that subscription members account for 25% of the chain’s transactions.
Pret A Manger, a sandwich chain, also launched its coffee subscription program in the UK in 2020, and it has been used 1.2 million times per week as of November. Besides the US and France, Pret offers subscriptions as well.
Chris Hosford, a communication consultant in southern California, joined Panera’s subscription plan a year ago. He stops at four or five Panera locations during his regular routes and often gets coffee and a bite.
He finds the monthly savings of the subscription plan to be modest but appreciates the convenience and reliability of the service.
Other restaurants, like Taco Bell, are exploring ways to enhance their subscription programs. Taco Bell’s $10 Taco Lover’s Pass offers a taco every day for a month, but the chain is considering adding more benefits to the subscription to increase its value for customers.
Subscription programs are gaining popularity as consumers become more comfortable, and restaurants find creative ways to exploit this trend.
However, not all subscription programs are successful, and restaurants must carefully consider whether such a program will work for them.
Despite this, subscription programs are expected to be a part of the restaurant industry’s future, as they offer a way for restaurants to generate stable revenue and provide customers with a reliable and convenient service.