Toast Inc (NYSE:TOST) stock fell 5% Monday morning following the company’s announcement of substantial price reductions for its software packages targeting smaller restaurants, raising concerns about competitive pressures in the sector.
According to Baird analyst David Koning, who tracks Toast’s pricing weekly, monthly fees for the “Core” and “Growth” software packages have been lowered by 26-58% across most hardware types. These adjustments were not reflected in last week’s review.
For handheld and countertop hardware kits, the Core Software package was reduced roughly 34% to $144 per month from $219, while the Growth Software package saw a deeper cut of about 58%, falling to $244 per month from $578.
Self-service hardware kits experienced similar reductions: Core Software prices dropped 26% to $184 per month from $249, and Growth Software fees fell 53% to $284 from $608 monthly. The Basic Software option for self-service hardware, however, increased slightly by 10% to $109 per month.
The cuts appear aimed at smaller restaurants processing under $1 million in annualized volume per location, below Toast’s typical customer base. Processing fees remain unchanged.
“These price reductions align with reports of growing competition in the restaurant technology space, including rumors of hardware giveaways by competitors trying to attract merchants,” said Koning.
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