Panera Says Subscription Drives Customer Acquisition Despite Inflationary Pressures

Panera Bread

Panera has found that its subscription has been key to growing its customer base amid inflation.

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.”

The brand’s beverage subscription, Unlimited Sip Club, which offers a free beverage every two hours for a flat $10.99 monthly fee, has been driving loyalty, providing a higher-value option for price-sensitive customers. The restaurant recently announced the launch of an annual option for a slightly lower price, at 12 months for the price of 10.

First-time restaurant customers can be high-value, spending more than returners, according to research from the December edition of PYMNTS’ Restaurant Digital Divide study, “The 2022 Restaurant Digital Divide: Turning First-Time Diners Into Loyal Customers.”

The report, which draws from a survey of more than 2,200 U.S. consumers, reveals that 34% of consumers try new restaurants each month. Meanwhile, returning customers are estimated to account for between 83% and 90% of all restaurant orders. The former group spends $35.20 on average on those first-time restaurant orders, while the latter spends $19.40 per order on average.

“More companies are seeing the benefit of engaging and rewarding loyal fans by introducing subscription offerings to offer added convenience and value to guests,” Luz said.

Indeed, restaurant chains ranging from P.F. Chang’s to Taco Bell to Sweetgreen have been investing in their subscription offerings, promising benefits ranging from free delivery to daily credits to menu items.

These kinds of initiatives to keep consumers coming are especially key now, with many diners reining in their restaurant spending. Research from PYMNTS’ study “Consumer Inflation Sentiment: Inflation Slowly Ebbs, but Consumer Outlook Remains Gloomy,” for which we surveyed more than 2,100 consumers, found that 78% have been eating at home more often to save money amid inflation.

Yet subscriptions can be key to combatting this trade-down, as they attract restaurants’ most loyal customers, per data from PYMNTS’ study “Digital Divide: Restaurant Subscribers And Loyalty Programs.”

The report, 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. That said, 78% 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.

Indeed, subscription programs present a chance for restaurants to embed their offerings in consumers’ day-to-day lives, significantly driving frequency.

“There’s a lot of benefit to becoming part of our guests’ routines,” said Luz, “like a morning cup of coffee or an afternoon refreshment.”