For university students, the Prêt Coffee Subscription is a cultural phenomenon. For only £20 a month, a caffeine-addicted scholar can get up to five coffees a day, every day. The only competing demographic in terms of coffee reliance might be corporate professionals, who have some of the highest coffee consumption rates of all groups. With the recent price hike from £20 to £25 a month for the subscription, it is a good time to start to question just how the subscription really works, who exactly is benefits, and how the company manages to turn a profit.
To begin with, the subscription model is based off of one implemented by the popular U.S. food chain Panera, which began selling monthly unlimited drip coffee at only $8.99 in early 2020. After Prêt’s growth stagnated during the pandemic, leading to 28 shop closures and 60% lower sales, it was obvious that a drastic business move was required. This resulted in the subscription of cult following: 5 coffees a day, every 30 minutes, with a plethora of add-ons such as syrups and non-dairy milks. At certain stores, smoothies, frappes, and more, are also included in the deal.
Objectively, the subscription has vastly increased the name-value and popularity of Prêt A Manger. For the coffee-reliant, the subscription saves an immense amount of money (and, realistically, very few non-frequent coffee drinkers will invest in it). Even if a subscriber were to only get one coffee a day, they would still save £50 a month compared to standard coffee pricings. Though unrealistic, at five coffees a day £350 is saved. A more likely scenario is a slightly more indulgent coffee: an oat milk mocha, for example, costs £3.25. At one a day £73 is saved per month.
The same scenarios can be calculated in endless variations, resulting in the obvious: the subscription can save one an immense amount of money. So with the high costs of coffee ingredients and labour, how can Prêt sustain itself? The business model, while precarious, nevertheless encourages extra spending for customers. Subscribed customers visit more frequently and with more loyalty than anyone else, so they inevitably spend more on sandwiches, snacks, and pastries. These foods tend to have higher profit margins than the actual coffee, made of relatively cheap ingredients but valued on restaurant-level pricings. They also bring non-subscribed friends or colleagues that generate revenue further for the company. Though the company may lose money on subscribers alone, the strategy relies on increased consumer spending and an escalated name-brand popularity.
After all, any student can recognise the cultural effect of the Prêt subscription. University students are accustomed to subscription services more than any other generation; equally, they are more easily hooked on the first free month of coffee. With 92% of university students drinking coffee and 79% showing signs of high caffeine dependence, it makes sense that the subscription is essential for academics. While very few people drink five coffees a day, students are often the exception. In university towns, along with major university cities such as London, it is common for a Prêt A Manger to be within walking distance at all times. These factors heavily contribute to the phenomenon of the Prêt subscription for university students: everyone either has one, has tried the free trial, or is possibly borrowing it from a friend. Though the Prêt subscription increases the popularity of the brand and encourages reliable and additional spending, it still undoubtedly provides a good deal for individuals. It is perhaps a sign if the price is increasing, and the company releases few statistics, that the profit margin is more nuanced. Regardless, it has launched Prêt A Manger as a household name with a cult following of university students.