The decline of the ‘free’ coffee

We all love a good deal.

Especially on our daily coffee which, in some places, is closer to £4 a cup nowadays than £3.

High street coffee shops enjoy offering us a deal too – especially if we buy into their loyalty models, which until recently seemed nearly as attractive as a silky smooth latte.

And yet almost four years after launching its wildly popular subscription, Pret A Manger has become the latest coffee chain to ditch it in favour of a less generous scheme.

Under the current system, subscribers who pay a monthly fee of £30 get 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 offer on the high street”.

The change also ends the 20% discount on food for subscribers.

Pret said it had “never really got comfortable” with the dual pricing system across its food products.

The social media site X was awash with criticism following the Pret news.

“You mess about with loyalty schemes at your peril,” warned retail expert Catherine Shuttleworth.

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

Pret is not the only coffee shop to have watered down its loyalty scheme.

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

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

Customers went from needing eight stamps (or “beans”) on their loyalty cards to qualify for a free drink, to needing 10.

At the end of 2022, Starbucks announced more loyalty points would be required to redeem many of its menu items.

Customers who enrol in the chain’s Starbucks Rewards programme earn points (or “stars”) when purchasing food or drinks.

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

Experts told the BBC that less generous loyalty schemes were “not a surprise” with the rising cost of labour, packaging and the coffee itself.

The cost of arabica beans has soared in recent years because of the impact of climate change in countries such as Brazil and Ethiopia.

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

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

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

“But if there’s one party losing out, it won’t work, and the big question is, was this commercially viable for Pret? I suspect not.”

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

“I only have a subscription because I couldn’t be bothered 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 just stop being lazy.”

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

A third customer said: “I already get 25% [off] coffee from Nero with Compare the Market. Why would I continue to pay Pret for a similar discount scheme? Madness.”

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

“Consumers today want immediate value. They shouldn’t need a calculator to work out if they’re getting a good deal,” retail analyst Natalie Berg said.

But Ms Shuttleworth said “Pret will be hoping people are lazy and stuck in their routines”, though others might vote with their feet.

“From Pret’s perspective, this subscription increased footfall and the chance of higher spending because people come for the coffee and pick up breakfast or a sandwich en route to the counter,” she said.

“They did it to get customers back in after the pandemic when everyone was returning 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.”