The Grocer

Could Pret’s Subscription Scheme Work In Grocery?

Could Pret’s Subscription
Scheme Work In

Club Pret is Pret’s subscription scheme.  It has been seen as an important factor in Pret’s improved performance post COVID.  The scheme asks consumers to pay £30 a month in return for up to five free drinks a day and 20% off all food.  In Pret stores I’ve visited recently, I’ve seen two prices for every food item – the “standard” price plus the Club Pret price.

You have to admire Pret’s boldness.  But what they are doing may carry risks.  Here are three of them.

First, there is a danger of alienating non-members.  They can see that they must pay 20% more for any food item than people (members) who may be standing nearby.  Supermarket shoppers can experience something similar when confronted with member-only pricing, but normally only on a few lines (less than 5% of all SKUs).  On the rest, everyone pays the same.  It would be interesting to know how many occasional visitors have walked out of Pret, unhappy to pay 20% more than others.  The risk of alienating non-members may be a reason why Tesco do not make much noise about Clubcard Plus (their scheme which offers 10% off two large shops a month, for an £8 monthly fee).

Second, the scheme changes the nature of the relationship between Pret and its best customers.  Yes, scheme members enter by choice but there is a very different relationship once the subscription starts.  To maximise the value the scheme offers, members need to visit Pret as often as possible.  In one sense, this is great news for Pret.  But it can mean members visiting when they’d ideally prefer to visit somewhere else.  Cost becomes a primary driver, potentially at the expense of convenience and variety.  For a company all about great food, that is quite a change.

Third, what to do about lapsed members?  It must be galling for someone who has got used to the 20% cheaper food to then return to paying “full whack”.  Whether people decide to leave the scheme simply to cut a monthly cost or because they just fancy a change, they may then go from regular customer to very occasional.

Pret has talked about the scheme working for them.  If so, well done them.  But it’s hard to imagine subscription schemes taking over in grocery.  The loyalty schemes common in our industry – a simple sign-up process, points for spend and often member only pricing – seems to work well.  Most shoppers happily surrender their data for the benefits provided.  Retailers are happy with the data and what they can do with it.  The idea of locking in shoppers via subscriptions has basic appeal but would be very difficult to make work at scale.

​Jeremy Garlick is a Partner of Insight Traction, consulting with FMCG and Retail companies. He was formerly Head of Insight at Sainsbury’s, Waitrose and Premier Foods.

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