Convenience Stores Use Subscriptions to Keep Cash-Strapped Consumers Coming Back

As consumers cut spending, convenience retailers are leveraging subscriptions to keep them coming back.

Most recently, mid-size convenience store chain Parker’s, which has more than 70 locations in Georgia and South Carolina, announced via Twitter the launch of a new beverage subscription, Chewy’s Drink Club, offering one free large fountain drink, tea or lemonade per day for $6.99 for 30 days.

This changes everything! Chewy’s Drink Club is here, y’all. Sign up now, and receive one free large fountain drink (or tea or lemonade) daily for the subscription cost of $6.99 per month. Enroll through our Parker’s Rewards app today! pic.twitter.com/mcjEqZxImU

— Parker’s (@ParkersKitchen) March 1, 2023

The program, which follows the model of convenience store chain Circle K’s limited-time Sip & Save subscription, which ran in 2021, can only be accessed through the new Parker’s Rewards app, which was announced Wednesday (March 1), such that the retailer aims to use the subscription to drive adoption of the new loyalty program.

“We plan to offer fun new ways for Parker’s Rewards members to earn more rewards points than ever,” Parker’s Loyalty and Brand Manager Nick Hand said in a statement. “Our latest enhancements include more personalized offerings and messaging, as well as faster access to our current discounts and promotions. Our goal is to understand and engage with our customers at a new level.”

The news comes as convenience stores are challenged to find new ways to secure their customers’ loyalty, facing pressure from consumers’ inflation-related belt-tightening. PYMNTS’ study “Consumer Inflation Sentiment: Consumers Buckle Down on Belt-Tightening,” for which we surveyed more than 2,600 U.S. consumers, found that 66% are cutting down on nonessential retail spending and 58% are reining in nonessential grocery spending.

Parker’s is certainly not the only convenience retailer turning to subscription commerce to drive engagement in the face of these challenges. For instance, convenience giant 7-Eleven has been leveraging its Gold Pass subscription program in its 7Now app, offering free delivery for $5.95 per month. Multinational convenience giant Couche-Tard, meanwhile, has its Unlimited Wash carwash subscription at participating locations for $59.99 a month.

The beverage subscription model that Parker’s is leveraging seems to be an effective one. While Circle K’s program may have been short-lived by design, restaurant brand Panera Bread, the fast-casual bakery-café chain with more than 2,100 locations across the United States and Canada, has been offering a coffee subscription for years, one which the company expanded to include more beverages last year.

In an interview with PYMNTS, Eduardo Luz, chief brand and concept officer at the restaurant, discussed how the subscription model has been 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.”

On the flip side, while subscriptions may offer retailers and restaurants a way to ease the concerns of cost-conscious customers, promising them more value while driving loyalty for the business, many consumers are looking to pare back the number of subscriptions they hold.

PYMNTS’ study “The State of Subscription Business: Best Practices and Business Performance Drivers,” created in collaboration with FlexPay, found that 48% of subscription companies expect challenges in attracting new customers over the next 12 months. Plus, 37% are facing difficulties with retention.