Netflix is perhaps seen as the most successful modern subscription model, but as a concept, subscriptions – e.g. for magazines – have been around for years.
Even within food and drink, they’re nothing new, with the likes of Pact Coffee, Hello Fresh and Deliveroo Plus (launched two years ago) – even milk rounds long before them. But we’re now seeing the subscription model being translated and tested in mainstream grocery and foodservice.
Tesco and Pret enter the fray
In October last year (2019), Tesco launched Clubcard Plus. For £7.99 a month, it gives subscribers 10% off two shops in-store every month, plus other benefits. And this month (September 2020) Pret a Manger announced a £20 a month subscription service called YourPret Barista which allows subscribers up to 5 drinks a day every month.
When big operators launch groundbreaking initiatives, it tends to have a ripple effect within their markets. As the CEO of Panera Bread, Niren Chaudhary, was quoted when the US coffee chain launched its coffee subscription service in February, “We are disrupting the industry.” It therefore feels like an apt time to consider the potential of the model in the context of the UK restaurant market.
Could a subscription model work for UK restaurants?
Let’s say a restaurant offers two meals a month, for two people, for a set monthly fee. Even in non-COVID-19 times, such a concept could be difficult to manage as a dine-in offer. But a subscription service feels much easier to manage as a delivery-only service, for example, a hot restaurant-prepared meal, delivered every Saturday evening to subscribers.
As with most things, timing is everything. And at a time when many will be working from home for the foreseeable future, the delivery of e.g. five lunch pots at the start of every week for a set amount every month, might be an attractive proposition. It’s worth noting that in the US, Panera has reportedly toyed with “some kind of kid-focused lunch subscription”, according to US restaurant commentators, Grub Street.
So, what would be the benefit to restaurants?
The advantages to cashflow – and the added confidence to invest – of having a consistent, recurring and predictable level of income has to be attractive. As does the opportunity to build a loyal base of regular customers. And with restaurant footfall lower because of COVID-19, any initiative which continues to get your food – and your brand – into diners’ hands feels strategically worth exploring, even as a temporary measure until footfall increases again.
But there are challenges, like striking the right deal to whet customers’ appetites and allows the restaurant operator to make money. Then there’s investment in tech and delivery drivers. Not to mention, constantly keeping menus fresh: dishing up the same old thing, month in, month out, just won’t wash. For example, Hello Fresh is keen to point out its “Near endless variety” as a key selling point.
At a time when restaurants must innovate to stay alive, a subscription model feels worthy at least of consideration.