The decline of the ‘free’ coffee

Especially on our daily coffee which in some places now costs closer to £4 a cup than £3.

And yet, nearly four years after launching its hugely popular subscription, Pret A Manger has become the last coffee chain to abandon it in favor of a less generous regime.

Under the current system, subscribers who pay a monthly subscription of £30 receive up to five ‘free’ coffees a day.

But from September, Pret will offer up to five half-price coffees a day for £10 a month, which it says “will continue to be the best deal on the market”.

Pret said she had “never really been comfortable” with the dual pricing system on her food products.

Social media site X was inundated with criticism following Pret’s announcement.

“If you play with loyalty programs, do so at your own risk,” warns retail expert Catherine Shuttleworth.

“Commercially it might make a lot of sense for Pret, but the reaction – it plays into the hands of their competitors.”

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

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

Customers previously had to put eight stamps (or “beans”) on their loyalty card to qualify for a free drink, but now need ten.

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

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

Hot coffee, tea, or baked goods now require 100 stars, double the previous price of 50 stars.

The price of Arabica beans has soared in recent years due to the impact of climate change in countries such as Brazil and Ethiopia.

The industry is also still struggling with high energy and utility bills.

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

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

“But if one side loses, it won’t work, and the big question is whether it was 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 want to bring my own drinks to work and there’s a Pret in my building,” one user said on X.

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

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

A third customer said: “I already have 25% [off] Nero’s coffee with Compare the Market. Why should I continue to pay Pret for a similar discount program? It’s madness.”

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

“Today’s consumers want immediate value. They shouldn’t need a calculator to figure out if they’re getting a good deal,” said retail analyst Natalie Berg.

But Ms Shuttleworth said “Pret hopes people are lazy and stuck in their routines”, although others might vote with their feet.

“From Pret’s perspective, this subscription has increased footfall and the likelihood of higher spend as people come in for a coffee and grab breakfast or a sandwich on their way to the counter,” she said.

“They did it to attract customers after the pandemic, when everyone was going back to their offices, 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 them as a business, but it’s a big risk.”