The subscription model has infiltrated numerous aspects of modern life, from streaming services to meal kits. However, the sustainability and consumer impact of these models are constantly being debated. In the UK, Pret a Manger’s ‘Club Pret’ subscription service has sparked significant interest and controversy. This article will delve into Pret’s unique subscription strategy, its recent crackdown on account sharing, and whether it signals a broader trend—or a cautionary tale—for the subscription economy.
By examining Pret’s approach, we can better understand the potential pitfalls and benefits of subscription-based business models. The question remains: Is Pret at the forefront of a new subscription war, or are they merely testing the limits of consumer loyalty?
The Pret Phenomenon: More Than Just Coffee
Pret a Manger, a sandwich shop ubiquitous in London, has become a British institution. While its presence is less pronounced in other parts of the world, its impact on the UK market is undeniable. Known for its overpriced sandwiches and even more overpriced coffee, Pret has carved out a niche as a slightly more sophisticated alternative to other high street coffee chains like Starbucks. However, it was their launch of ‘Club Pret’ in 2021 that truly set them apart.
Priced at £30 a month (at the time of writing), Club Pret offers subscribers five barista-made drinks per day and a 20% discount on all other menu items, including food. This subscription model incentivizes frequent visits and aims to convert occasional customers into loyal patrons, drawn to the promise of savings—provided they consume enough coffee and sandwiches.
The Pricing Trap: Tourists vs. Subscribers
Pret’s pricing strategy appears to operate on two levels. First, prices have increased beyond reasonable levels, making individual purchases less appealing to the average consumer. For example, charging £3.80 for a flat white seems excessive. This high pricing serves as a ‘trap’ for tourists, who are less price-sensitive and unaware of the local market value.
Secondly, these inflated prices push regular customers toward the subscription model. Coffee becomes a gateway drug, encouraging the purchase of higher-margin food items. The goal is to increase overall sales and foot traffic, even if it means initially sacrificing individual coffee sales. The inertia of subscriptions also plays a significant role, with many subscribers potentially underutilizing their subscriptions yet continuing to pay month after month.
Account Sharing Crackdown: Netflix’s Influence
Recently, Pret implemented measures to curb account sharing, requiring QR codes to be accessed via the Pret app. This move mirrors actions taken by companies like Netflix, who have recognized the significant impact of account sharing on their bottom line. Netflix’s efforts to prevent account sharing led to a notable increase in subscribers and improved financial performance.
However, key differences exist between Netflix and Pret. Netflix has a lower price point (£7.99 pcm in the UK), the subscription model is standard in the streaming industry, and Netflix had a vast user base untouched by account sharing. Pret, on the other hand, is unique among British high street retailers in embracing subscriptions, and their system has been exploited since its inception.
Pret’s Vulnerability: Loyalty vs. Alternatives
Pret is betting that its patrons are now too entrenched in the subscription to abandon it, even with stricter rules. But this strategy is not without risk. Customers may seek alternatives if the value proposition diminishes. With no other chain offering a similar service, Pret has some leverage, but pushing too hard could drive customers away.</p
The crucial question is how Pret customers will restructure their ‘internal cartels.’ Will individuals bear the full financial burden, or will groups dissolve their shared accounts? If most multi-person accounts are simply acts of generosity, the impact may be minimal. However, if accounts are funded through group chats and shared expenses, the changes could lead to cancellations.
A Canary in the Coal Mine: The Subscription Economy
The Pret subscription serves as an indicator of broader economic trends. Its initial success was clear, with a significant portion of customers embracing the model. The appeal spans both white-collar and blue-collar workers, driven by the value proposition of approximately 20p per drink. However, this success could invite competition, similar to how Netflix faced challenges from numerous streaming rivals.
If no competitors emerge, it may signal that the subscription model is less viable for goods than for services. Subscriptions rely on inertia; subscribers often forget to cancel, providing companies with consistent revenue. If Pret’s restrictions lead to a decline in subscribers and no rival enters the space, it suggests the model may not be sustainable for physical products.
Voting with Your Feet: Consumer Power
The changes to the Pret scheme offer consumers an opportunity to voice their opinions. Pret has already faced criticism for inflated prices and aggressive expansion tactics that stifle competition. Squeezing their subscriber base could backfire if customers decide to seek alternatives or abandon the subscription altogether.
Future changes could include price increases and tiered systems, potentially segmenting coffee options based on cost. If these changes result in an increase in Pret’s subscriber base, it may indicate that the subscription model is here to stay, despite its flaws. However, consumers have significant power, and their choices will determine the future of Club Pret and the broader subscription economy.
Conclusion: The Future of Subscriptions
Pret’s experiment with subscriptions offers valuable lessons about consumer behavior and the viability of subscription models in the food and beverage industry. The company’s recent crackdown on account sharing is a critical test of consumer loyalty and the perceived value of the Club Pret subscription. Will customers adapt to the new restrictions, or will they seek alternatives?
Ultimately, the success or failure of Pret’s strategy will provide insights into the broader subscription economy. If Pret can maintain or even grow its subscriber base despite the changes, it may encourage other businesses to adopt similar models. However, if subscribers revolt and abandon Club Pret, it could signal a shift away from subscriptions and a return to more traditional purchasing habits.
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