This week in restaurants, Sweetgreen revives Sweetpass, Wingstop taps personalization and Domino’s reinvigorates its rewards.
Los Angeles-based, health-focused fast-casual chain Sweetgreen, which has more than 180 locations, said on a call with analysts Thursday (Feb. 23) discussing its fourth-quarter 2022 financial results that it is bringing back its paid subscription program.
“[An] enhancement we are making to our digital experience is our loyalty program, Sweetpass. Sweetpass will have both a free and subscription component to it. This week we started a phased rollout of Sweetpass with customers in Colorado,” Co-founder and CEO Jonathan Neman said. “In April, we will launch our Sweetpass program nationwide, making eating Sweetgreen every day more effortless and rewarding.”
When the company piloted the program last year, the subscription offered one $3 credit per purchase per day for a monthly $10 payment.
“I think what’s amazing about the subscription is we’re so uniquely positioned to make that work. We have a food that is healthy, that is naturally habitual and very high digital penetration, which gives us a lot of confidence,” said Neman.
Sweetgreen is not the only brand revisiting its subscription offerings. The comments came just one day after fast-casual giant Panera Bread, which has more than 2,000 locations across the U.S. and Canada, announced Wednesday (Feb. 22) the addition of an annual membership option to its Unlimited Sip Club beverage subscription, offering 12 months for the price of 10 with the further benefit of free delivery on digital orders.
These moves come as subscriptions offer brands a way to maintain customer frequency in the face of inflation.
“We have seen incredible response to Unlimited Sip Club since we launched nationally last year, both for our guests and for our business,” Eduardo Luz, Panera Bread’s chief brand and concept officer, said in a statement. “Today, one in four Panera transactions come from Unlimited Sip Club members — the program is helping to drive transaction growth despite a highly inflationary environment, and to bring in new guests to experience everything Panera has to offer.”
While the majority of consumers are not interested in restaurant subscriptions, those who do seek the option are restaurants’ best customers, according to data from PYMNTS’ study “Digital Divide: Restaurant Subscribers And Loyalty Programs.” The study, which drew from a December survey of more than 2,000 U.S. adults, found that only 17% of consumers are “very” or “extremely” interested in being provided a restaurant subscription service, and 25% are neutral to the concept.
Yet subscription-interested consumers are brands’ most loyalty supporters. Seventy-eight percent of subscribers and 73% of those interested in subscriptions reported being very or extremely loyal toward their preferred QSRs. Conversely, just 41% of those uninterested in subscriptions said the same.
Fast-casual brand Wingstop, which has nearly 2,000 locations around the world, is testament to the power of investing in digital.
The company shared in its fourth-quarter financial results that its digital mix rose to 63% in the quarter, with tech investments improving both its ability to draw new consumers into the digital fold and to hold onto those already in the system.
“Our best-in-class digital platform continues to be a competitive advantage for us with nearly $1.7 billion generated from digital sales in 2022,” CEO Michael Skipworth told analysts on a call. “The increased level of national advertising, the launch of chicken sandwich, and investments in our technology platform were catalysts for significant growth in our new digital guest acquisition rates and retention during the quarter.”
Certainly, digital demand has increased According to data from “Connected Dining: Rising Costs Push Consumers Toward Pickup,” a PYMNTS exclusive report, for which we surveyed more than 2,100 United States consumers, nearly half of all restaurant meals are purchased for off-premise consumption. However, the vast majority of these — 80% — are pickup orders.
The wings brand has seen growth across delivery and pickup, including non-digital pickup orders.
These digital investments come at a time when restaurant customers’ loyalty is being compromised by macroeconomic pressures, according to data from PYMNTS’ report “The 2022 Restaurant Digital Divide: Restaurant Customers React To Rising Costs, Declining Service,” for which we surveyed more than 2,300 restaurant customers in December. The study found that 67% to 88% of diners, depending on generation, have made changes to their dining spending, with the most popular change cited being purchasing from restaurants less often.
Against this backdrop, with restaurants being challenged to work harder to retain their customers, Domino’s is looking to inject new life into its loyalty program, Piece of the Pie, which originally launched back in 2015.
The quick-service restaurant (QSR) giant, which has more than 19,500 stores around the world, said on a Thursday (Feb. 23) call with analysts discussing its fourth-quarter 2022 financial results that it will “refresh and improve” the program this year.
“We’ve got over 30 million active members, 77 million total members, and really at this point, as we think about the evolution of the rewards program, it is about … keeping the best of what we have and then continuing to dial up on where the opportunities are,” CEO Russell Weiner said, declining to state specifics.