1 in 7 Food Subscribers May Cancel by Next Payment

meal kit

Consumers are cutting back on their product subscriptions, with many rethinking their food purchasing.

By the Numbers

Research from PYMNTS’ new study, “Subscription Commerce Readiness Report: Bridging the Gap Between Subscription Conversion and Retention,” created in collaboration with sticky.io, which draws from a census-balanced survey earlier this year of more than 2,200 consumers with retail product subscriptions, reveals that 15% of those who have paid for food and beverage subscriptions may cancel after the current payment period ends.

Specifically, 5.5% of these subscription holders reported that they are sure to do so, and 10% of them reported being equally likely to renew or cancel.

The Context

The meal kit subscription sector, for one, has been facing challenges. Blue Apron, for instance, announced in December that it is laying off about 10% of its corporate staff and looking to dramatically reduce its expenses, intending to shave $50 million off its annual spending this year relative to last. The company only recently regained compliance with the New York Stock Exchange continued listing standards.

Plus, earlier this year, Berlin-based multinational meal kit company HelloFresh pulled out of Japan less than a year after entering the country. Moreover, prepared meal subscription company Freshly stated around the same time that it is halting direct-to-consumer (D2C) meal deliveries as economic challenges rack the company and the broader meal delivery industry.

On the flip side, however, many restaurants are stepping up their subscription efforts, launching, reviving or refining such programs.

In an interview with PYMNTS, Eduardo Luz, chief brand and concept officer at Panera Bread, the fast-casual bakery-café chain with more than 2,100 locations across the United States and Canada, spoke to the value of the subscription model at driving new customer growth at a time when many consumers are pulling back.

“We expected our most loyal and frequent MyPanera members to join the program, but what’s really been interesting is the number of guests joining Unlimited Sip Club that are new to Panera,” said Luz. “Since the launch of Unlimited Sip Club, more than half of its members are new to our MyPanera loyalty program in general.”

subscription cancellations