Fast-casual restaurants lean on loyalty programs amid consumer pullback

As some shoppers pull again on spending amid financial uncertainty, fast-casual restaurant chains are leaning on rewards packages to drag them again in.

Loyalty packages, which supply reductions or added perks for returning clients, have transitioned from being a pleasant bonus for eating places to vital. As cost-cautious diners prioritize worth, manufacturers like Chipotle, Starbucks, Cava and others are using rewards to maintain clients coming again and constructing habits that transcend the occasional coupon.

“In powerful occasions, loyalty packages turn into extra important,” stated Peter Fader, a advertising and marketing professor on the Wharton College on the College of Pennsylvania. “They turn into a required ingredient to constructing and sustaining relationships.”

Within the 12 months led to Might, the restaurant business solely noticed month-to-month site visitors improve as soon as, in November, in accordance with Black Field Intelligence information. As diners go to eating places much less regularly, gross sales wrestle. Solely 43% of restaurant manufacturers tracked by Black Field reported same-store gross sales development in Might.

Shoppers who be a part of loyalty packages go to eating places extra regularly, making 22% extra visits per yr to eateries, in accordance with Circana information. In addition they frequent the manufacturers that they belong to at twice the speed of nonmembers, the market analysis agency discovered.

Espresso large Starbucks reported 34.2 million lively rewards members in its second quarter and stated greater than 59% of its U.S. company-owned transactions got here from these members. Potbelly has seen comparable success: Within the first quarter of 2025, over 42% of its complete store gross sales got here from digital enterprise, which incorporates the loyalty program customers.

Chipotle has over 20 million lively rewards members. It is loyalty program makes up roughly 30% of gross sales on common every day and helped the burrito chain to keep away from main value hikes, in accordance with the corporate.

“We have now actually sturdy model loyalty amongst our members,” Nicole West, Chipotle’s vp of digital experiences, informed CNBC. “We’re actually targeted on partaking with our members and doing that in a method that basically resonates with them.”

Driving loyalty is essential for the likes of Chipotle and Starbucks. Within the first quarter, Chipotle posted a same-store gross sales decline for the primary time since 2020 and stated it noticed a “slowdown” in shopper spending. In the meantime, Starbucks’ same-store gross sales have fallen for 5 straight quarters.

Cava is bucking business tendencies with sturdy gross sales development, however faces Wall Avenue stress to keep up its fast growth.

As rewards packages decide up steam, extra manufacturers are getting inventive and shifting past the worth meal.

Cava revamped its rewards program in October 2024 to present clients extra flexibility in how they earn and use factors. Members can earn factors every go to and redeem them for particular objects like pita chips or full entrees. This system additionally contains limited-time presents and in-app challenges. In late March, the corporate celebrated Nationwide Pita Day by rolling out a mascot named “Peter Chip” and providing members complimentary pita chips.

“Visitors wish to see periodic surprises and delight moments the place we are able to reward them with pita chips or different model choices,” Andrew Rebhun, Cava’s chief advertising and marketing officer, stated

The Cava Rewards program now has greater than 7 million members. A brand new tiered system is predicted to launch quickly, in accordance with Rebhun.

Chipotle this yr launched a seasonal marketing campaign known as “Summer time of Extras.” The marketing campaign is making a gift of over $1 million in free burritos, encouraging clients to rack up visits and compete to turn into the highest Chipotle customer of their state.

“We proceed to see activations on this program construct and pleasure and constructive response throughout social media from our followers,” West stated. “We simply proceed to concentrate on delivering worth to them in methods via packages the place clients are given alternatives to ‘plus up’ their factors or earn particular presents by exhibiting particular behaviors.”

Salad chain Sweetgreen additionally retooled its loyalty program this spring, shifting away from its tiered subscription program that many shoppers discovered complicated.

“In a difficult business surroundings the place shoppers are making extra intentional selections with each greenback, SG Rewards is designed to meet the second by delivering a significant worth,” Sweetgreen co-founder and CEO Jonathan Neman stated on the corporate’s quarterly convention name in Might.

Even Starbucks, a longtime chief in rewards packages, has made adjustments. In June, the espresso chain ended its 25-star reusable cup bonus and changed it with double stars throughout the complete buy. Whereas the change was controversial amongst loyalists, who claimed the incomes potential was decreased, the espresso chain stated participation has remained regular.

After all, giving free rewards comes with tradeoffs. Promotions lower into earnings in an business that faces tight margins in one of the best of occasions. Restaurant chains hope these freebies drive longer-term loyalty and spending on full-price objects.

Lengthy-term wins

Manufacturers navigating financial stress are seeing that loyalty packages are serving to to drive visits.

Potbelly revamped its loyalty system in early 2024, shifting to a coin-based construction that permits clients to redeem rewards sooner and throughout extra objects. Clients now have entry to over 14 menu objects via the rewards program. This flexibility has led to extra frequent visits, Potbelly’s chief advertising and marketing officer, David Daniels, stated.

“We noticed a carry virtually instantly by way of engagement,” Daniels stated. “The response has been extremely constructive.”

Chicago-style eatery Portillo’s joined the loyalty recreation in March with “Portillo’s Perks.” As a substitute of utilizing a conventional app, this system makes use of a digital pockets system and focuses on frequency. It tracks how typically a buyer visits and awards badges as they go.

“It offers flexibility to vary how this system is deployed,” Garrett Kern, Portillo’s vp of technique and culinary, stated to CNBC. “It would not require a redesign and relaunch to an software. It was a good way for us to get this system on the market in a branded and easy-to-use method.”

The corporate is aiming for 1.5 million to 1.7 million sign-ups by mid-summer.

— CNBC’s Amelia Lucas and Jacob Pramuk contributed to this report.