Paytronix recently released a data brief showing how convenience store and restaurant loyalty program members are continuing to shop despite prices continuing to rise. According to its previously released 2022 Loyalty Report, 55% of restaurant loyalty customers increased their average check size by more than the cost of menu items, indicating that inflation increased loyalty member visits.
Inflation in Retrospect
Analyzing the loyalty check sizes of 64 restaurants and convenience store brands that have operated continuously from January 2020 to today shows that loyalty customers reacted to rising prices by increasing their spend to match prices or by spending even more.
The group of customers affected arguably the most by inflation was fuel purchasers at convenience stores, who saw its average price more than double since the pre-pandemic halcyon days of January 2020. Fuel prices more than doubled by June 2022 before dropping again in October. Remarkably, loyalty customers’ check sizes stayed above the rise in price throughout the pandemic until prices rose nearly 70%, at which point check sizes finally dropped below the price increase.
Regarding in-store purchases, convenience store loyalty customers matched inflation in their check sizes and then some. Throughout 2020 and 2021, in-store convenience store checks exceeded inflation by a wide margin. At the beginning of the pandemic, convenience store checks rose rapidly as consumers shifted behavior to quicker trips to local stores. That behavior became cemented in the spring of 2021 and has held steady since then.
In the summer of 2022, the difference between checks and average item prices decreased. As item prices have started to rise, customers are either trading down or purchasing fewer items during their in-store excursions. This seems to indicate that convenience store customers have a limit to their in-store purchases, which appears to be based on a fixed dollar amount. They enter the store with a dollar figure in mind, say $10 or $20, and spend no more than that amount.
Restaurant Loyalty Customers
Starting from 2020, restaurant menu prices faced choppy fluctuations as the coronavirus waxed and waned. But starting in March 2022, menu prices began a steady rise, which has not abated as of October 2022, the last full month for which data was available for this report.
While the exact relationship between loyalty check size and prices can be difficult to determine, the trend is clear: loyalty members continued to spend despite inflation. Particularly as inflation has consistently increased starting around March 2022, loyalty member checks have increased in lockstep with prices. Broadly, loyalty programs ensure the most loyal customer segments keep pace with rising restaurant prices.
Based in Newton, Mass., Paytronix is a provider of SaaS customer experience management (CXM) solutions for restaurants and convenience stores. Through its innovative software design and integrations with more than 30 widely used point-of-sale systems, Paytronix empowers more than 1,800 brands across 34,000 locations, giving them the flexibility to deliver unique, revenue-enhancing guest experiences.