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Pay-Per-Chew: More restaurants trying subscription programs

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Matt Baker, chef and owner of Gravitas, poses for a portrait inside the restaurant, Tuesday, Feb. 14, 2023, in Washington. Gravitas has a subscription service offering a monthly meal for two. (AP Photo/Jacquelyn Martin)

By Dee-ann Durbin

Consumers are willing to pay monthly subscription fees for streaming services, pet food and even toilet paper. And now some restaurants are betting they’ll do the same for their favorite meals.

Large chains like Panera and P.F. Chang’s as well as neighborhood hangouts are increasingly experimenting with the subscription model as a way to ensure steady revenue and customer visits. Some offer unlimited drinks or free delivery for a monthly fee; others will bring out your favorite appetizer each time you visit.

They’re following a trend: The average American juggled 6.7 subscriptions in 2022, up from 4.2 in 2019, according to Rocket Money, a personal finance app.

“This is just another way for customers to provide a level of support and joy and love for our offerings,” said Matt Baker, the chef at Gravitas, a Michelin-starred restaurant in Washington.

For $130 per month, Gravitas Supper Club subscribers get a three-course takeout meal for two. Baker said Gravitas shifted to takeout during the pandemic but saw demand fizzle once its dining room reopened. The Supper Club — which serves about 60 diners per month — keeps that revenue flowing.

The upscale Chinese chain P.F. Chang’s also saw an opportunity to increase to-go orders with its subscription plan, which launched in September. For $6.99 per month, members get free delivery, among other perks.

Other restaurants are experimenting with memberships, which let diners pre-pay toward their visits.

El Lopo, a San Francisco bar, has 26 members in its Take-Care-Of-Me Club. They pay either $89 per month for $100 in dining credits or $175 per month for $200 in credits. When members come in, El Lopo starts bringing out their favorite dishes. Each visit, they can gift a free drink to anyone in the bar.

El Lopo owner Daniel Azarkman started the club in March 2021 to encourage patrons to return as the pandemic eased. Now, he’s hearing from restaurants all over the country who are interested in starting similar programs.

“What it really achieves is getting them in more often,” he said.

Rick Camac, executive director of Industry Relations at the Institute of Culinary Education, said he expects many more restaurants to offer subscriptions in the coming years. Consumers are accustomed to them, he said, and the regular monthly income helps restaurants manage their cash flow.

But not all subscription programs have had success. In 2021, On the Border Mexican Grill introduced its Queso Club, which offered free cheese dip for a year for $1. The program stopped taking new subscribers a year later.

Edithann Ramey, On the Border’s chief marketing officer, said more than 150,000 people signed up for the Queso Club, and members visited seven times more often than the average guest. But the Dallas-based chain wasn’t making enough to cover the cost of the dip.

On the Border is now retooling the program and expects to reintroduce it later this year. It may charge more or move to a monthly model, Ramey said, but the subscription element will remain.

“It’s becoming kind of a hot trend and we want to stay as a leading brand,” Ramey said.

Taco Bell is also tinkering with its $10 Taco Lover’s Pass, which lets subscribers get a taco every day for a month. The pass was introduced in January 2022 and again in October; it generated buzz, but the chain is trying to think of ways to make it more valuable to consumers, said Dane Matthews, Taco Bell’s Chief Digital Officer. A subscription could promise faster service, for example, or unlock unique menu items.

Other restaurants have dropped subscriptions, saying they have their hands full just running the kitchen.

In late 2020, SheWolf, an upscale Italian restaurant in Detroit, started sending subscribers a box of pasta, sauces and other treats for $80 per month. But when its dining room fully reopened six months later, it was too much work to put together hundreds of boxes.

Still, SheWolf is keeping one foot in the subscription space. Dan Reinisch, the restaurant’s beverage director, sends Italian wines to about 80 subscribers who pay $60 or more each month.

Other businesses have had better luck. St. Louis-based Panera had nearly 40 million members in its loyalty program in early 2020, but it wanted to convince them to drop in more often. So it launched a subscription program that offered unlimited coffee and tea for $8.99 per month. Customers started coming in several times a week, and about one-third of the time they bought food.

Last year, Panera expanded the subscription. Now, members can pay $11.99 per month or $119.99 per year for unlimited hot and cold drinks. Annual subscribers also get free delivery.

Eduardo Luz, Panera’s chief brand officer, won’t share exact numbers but he said members now make up 25% of the chain’s transactions.

“It’s a huge traffic driver,” Luz said.

The idea quickly spread overseas. Pret A Manger, a sandwich chain owned by the same private company as Panera, launched its own coffee subscription in the U.K. in 2020. As of November, it was being used 1.2 million times per week. Pret also offers subscriptions in France and the U.S.

Chris Hosford, a communications consultant in southern California, joined Panera’s subscription plan a year ago. He passes four or five Paneras on his regular routes and often stops to grab a coffee and a bite to eat.

“It’s not a huge amount of savings for me — probably $5-10 in the average month,” Hosford said. “But I’m good with that.”

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Cost of living: Pepsi and Coca-Cola absent in meeting with federal industry minister

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Innovation, Science and Industry Minister Francois-Philippe Champagne speaks to reporters in the foyer of the House of Commons on Parliament Hill in Ottawa on Tuesday, Sept. 19, 2023. Canada’s industry minister made a point of calling out Pepsi and Coca-Cola for not sending representatives to a meeting he convened on Monday with manufacturing companies to discuss stabilizing grocery prices. THE CANADIAN PRESS/Sean Kilpatrick

 

Canada’s industry minister made a point of calling out Pepsi and Coca-Cola for not sending representatives to a meeting he convened on Monday with manufacturing companies to discuss stabilizing grocery prices.

François-Philippe Champagne singled out the two companies when asked by a journalist what the consequences would be if major industry players did not succeed in stopping high inflation.

“This morning, (their CEOs) did not attend the meeting,” Champagne said of beverage giants Pepsi and Coca-Cola.

“I intend to call on them and I will continue to do so. … I don’t stop,” he told reporters.

The Canadian leaders of seven international manufacturing companies, including Nestlé and Kraft Heinz, met with Champagne.

He summoned them to answer to Prime Minister Justin Trudeau’s call earlier this month for Canadian grocers to come up with a plan to stabilize prices by Thanksgiving.

If major grocers fail to deliver ideas, Champagne said, “the consequence is for all 40 million Canadians because we will be able to see who is taking action and who is not.”

A government source told The Canadian Press that the CEOs of Pepsi and Coca-Cola responded to the federal government summons by stating they were not available Monday. The source was granted anonymity because they were not allowed to speak publicly about the matter.

It’s unclear, however, whether another meeting between major food companies and the government will take place.

Monday’s meeting brought together top Canadian executives from McCain, Unilever, Nestlé, Lactalis, Lassonde, Kraft Heinz, and Smucker Foods.

All avoided speaking with journalists. The CEO of the Food, Health & Consumer Products of Canada association, Michael Graydon, attended the meeting and agreed to answer questions on their behalf.

Graydon called the meeting “very productive.”

”We’re very much about co-operation and support, collaboration,” he said. “It’s an industry that needs to align and work collectively to find a solution.”

He said manufacturers want to collaborate with other players in the supply chain, such as major retailers like Loblaw and Costco, whose leaders Champagne met with one week earlier.

In a statement, Pepsi said it is open to meeting with Champagne.

“We are pleased that our industry association, FHCP, led a productive conversation with the government and representatives from industry today,” it said.

“We were not able to attend today’s meeting, but we offered to meet with the minister. We are committed to collaborating with the government to identify solutions during this challenging time for Canadians.”

Trudeau has said that if the government isn’t satisfied with what major grocers come up with to stabilize prices, he would intervene, including with tax measures.

Graydon said it remains to be seen how detailed the plans will be by the government’s Thanksgiving deadline.

”We’ll have to see whether, you know, the detail of how much completeness can be done by that time. But I think everybody’s working very hard to achieve that,” Graydon said.

Champagne said he is happy Graydon “wants to do something,” because “it’s a gain for Canadians.”

“It’s clear that what’s important is that we have timelines, work plans, and obviously concrete actions,” the minister said.

This report by The Canadian Press was first published Sept. 25, 2023.

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Moneris confirms credit and debit card processing outage, but offers few details

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Toronto

The Canadian payment processing firm Moneris confirmed Saturday that credit and debit card transactions were interrupted by a network outage earlier in the day.

The Toronto-based technology company issued a statement saying there was nothing to suggest the outage was related to a cyber attack.

Complaints about outages started rolling in to the Downdetector.ca website before noon eastern time, but Moneris did not say when the outage started.

About three hours later, Moneris posted a message on X — the  social media site formerly known as Twitter — saying it had resolved the network problem.

It remains unclear how many businesses and transactions were affected, but data provided by Downdetector.ca indicated complaints had come in from across the country.

In a statement provided to The Canadian Press, the company said the outage lasted about 90 minutes.

“We have resolved the network outage and returned transaction processing to normal,” the statement said. “We continue to investigate the root cause of the issue. There are no indications this appears to be cyber-attack related and all transaction systems are functioning normally again.”

The company, a joint venture between  Royal Bank and BMO Bank of Montreal, said transaction processing could be slow as its systems catch up with the backlog.

Moneris says it supports more than 325,000 merchant locations across Canada.

This report by The Canadian Press was first published Sept. 23, 2024.

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