Circle K Parent Couche-Tard Offsets Loyalty Challenges With Subscription Strength

Convenience store giant Couche-Tard, parent company of its eponymous brand, Circle K and Ingo, is falling behind when it comes to boosting customer loyalty with rewards programs.

As food prices rise, restaurants, grocers and convenience stores alike are leveraging their loyalty programs to drive visits, incentivizing purchasing and maintaining continuous communication with their customers. Additionally, for the latter two, offering gas discounts is proving to be a powerful way to combat anxiety about fuel inflation.

Yet, Couche-Tard is not where it would like to be in terms of keeping up with competitors, as Brian Hannasch, the convenience retailer’s CEO and president, explained on a call with analysts Wednesday (Aug. 31) discussing the company’s first-quarter fiscal year 2023 financial results.

“We do not have a great loyalty program in place for fuel,” he said. “We have designed one we are piloting it in two markets in Denmark and in … South Carolina. We feel great about the results. … We think that will be a strong tool for us to be able to communicate and reward those loyal customers, both on the fuel [and] on the merch side.”

He cited delays working with the program’s point-of-sale (POS) provider as part of the reason the rollout has been slower than Couche-Tard initially imagined, noting that the company expects to expand the program by the end of the calendar year.

Meanwhile, in the absence of loyalty rewards, the company is leveraging its beverage subscription to boost visit frequency, offering free coffee, tea, soda and “Frosters” (iced, carbonated beverages) for $5.99 a month.

The company has also improved its online enrollment experience and doubled online subscribers.

Research from PYMNTS’ February/March study “Digital Divide: Restaurant Subscribers and Loyalty Programs” found that four in 10 consumers are open to restaurant subscription services. Specifically, the study, which drew from a survey of more than 2,000 U.S. adults, found that 17% of consumers are “very” or “extremely” interested in being provided a restaurant subscription service, and 25% are neutral to the concept. However, most consumers (58%) reported being just slightly interested or not interested at all in participating.

Read more: Four in 10 Consumers Open to Restaurant Subscription Services

Yet, the consumers who are interested are an extremely attractive demographic, given their eagerness to engage with food sellers’ loyalty offerings. The same study found that consumers who participate in restaurants’ subscription programs are more than twice as likely as non-subscribers to use quick-service restaurant (QSR) loyalty programs.

For example, health-focused fast-casual chain Sweetgreen found that its test of a subscription program, Sweetpass, which offered a $3 credit back on one purchase a day for 30 days for a $10 one-time fee, boosted visit frequency of customers across different levels of loyalty.

In an interview with PYMNTS, Sweetgreen Chief Digital Officer Daniel Shlossman noted that the offering not only drove visits for customers who already purchased often but also for those who had not been active in a while and for new customers.

“We saw that, no matter what type of customer you were, you came back more often in that period,” he explained.

See more: Sweetgreen Spins Purchases Into Personal ‘Challenges’ to Drive Mobile Engagement