The Decline of ‘Free’ Coffee

Especially for our daily cup of coffee, which in some places now costs more like £4 than £3.

And yet, almost four years after the launch of its wildly popular subscription, Pret A Manger is the latest coffee chain to ditch the scheme in favor of a less generous program.

Under the current system, subscribers who pay a monthly fee of £30 get up to five ‘free’ cups of coffee per day.

But from September, Pret is offering up to five cups of coffee a day for half price, for £10 a month, in what the company says remains “the best offer on the high street”.

Pret said the company was “never really comfortable” with the dual pricing system for its food products.

The social media site X received a lot of criticism after the news about Pret.

“If you tamper with loyalty programs, you do so at your own peril,” warned retail expert Catherine Shuttleworth.

“Commercially this may make a lot of sense for Pret, but the reaction to this is that it plays into the hands of the competition.”

You may not have noticed, but your wallet probably has.

Costa Coffee currently offers a free loyalty card, the Costa Club, but changed the terms and conditions last August.

Customers used to need eight stamps (or ‘beans’) on their loyalty card to qualify for a free drink. Now there are ten.

In late 2022, Starbucks announced that more loyalty points would be required to redeem many menu items.

Customers who sign up for the chain’s Starbucks Rewards program earn points (or “stars”) when they purchase food or drinks.

Hot coffee, tea or pastries now require 100 stars, doubling the previous price of 50 stars.

The cost of Arabica beans has risen dramatically in recent years due to the effects of climate change in countries like Brazil and Ethiopia.

In addition, the sector still struggles with high energy and utility bills.

Richard Lim, CEO of Retail Economics, told the BBC that subscription models offered value to customers, but they needed to be mutually beneficial to work.

“They can also be good for businesses because they generate predictable, stable income that can rely on recurring revenue,” he said.

“But if one party loses, then it doesn’t work. And the big question is: was this commercially viable for Pret? I suspect not.”

Costa and Starbucks’ announcements sparked outrage among customers at the time, and now it’s Pret’s turn.

“I only have a membership because I don’t feel like bringing my own drinks to work and there’s a Pret in my building,” said one user on X.

“With the new deal, it’s cheaper to just stop being lazy.”

Another said Pret had “broken their grip on the customer”.

A third customer said: “I already get 25% (off) on Nero coffee with Compare the Market. Why should I keep paying Pret for a similar discount scheme? Madness.”

An expert backed the new subscription model in an interview with the BBC this week, saying the old model was “alienating” non-subscribers.

“Consumers today want instant value. They shouldn’t have to use a calculator to figure out if they’re getting a good deal,” said retail analyst Natalie Berg.

But Ms Shuttleworth said: “Pret hopes people will be lazy and stuck in their routines”, although others may vote with their feet.

“From Pret’s perspective, this subscription has resulted in more customers and a greater opportunity for higher spending, as people come in for a cup of coffee and grab breakfast or a sandwich on the way to the checkout,” she said.

“They did it to bring customers back in after the pandemic, when everyone went back to the office, and it worked,” helping Pret return to profit last year for the first time since 2018.

“They now want to replace it with something that is better for their business, but that is a big risk.”