Fast-casual restaurants lean on loyalty programs to offset consumer pullback

As some consumers pull back on spending amid economic uncertainty, fast-casual restaurant chains are leaning on rewards programs to pull them back in.

Loyalty programs, which offer discounts or added perks for returning customers, have transitioned from being a nice bonus for restaurants to a must-have. As cost-cautious diners prioritize value, brands like Chipotle, Starbucks, Cava and others are utilizing rewards to keep customers coming back and building habits that go beyond the occasional coupon.

"In tough times, loyalty programs become more essential," said Peter Fader, a marketing professor at the Wharton School at the University of Pennsylvania. "They become a required ingredient to building and maintaining relationships."

In the 12 months ended in May, the restaurant industry only saw monthly traffic increase once, in November, according to Black Box Intelligence data. As diners visit restaurants less frequently, sales struggle. Only 43% of restaurant brands tracked by Black Box reported same-store sales growth in May.

Consumers who join loyalty programs visit restaurants more frequently, making 22% more visits per year to eateries, according to Circana data. They also frequent the brands that they belong to at twice the rate of nonmembers, the market research firm found.

Coffee giant Starbucks reported 34.2 million active rewards members in its second quarter and said more than 59% of its U.S. company-owned transactions came from those members. Potbelly has seen similar success: In the first quarter of 2025, over 42% of its total shop sales came from digital business, which includes the loyalty program users.

Chipotle has over 20 million active rewards members. It's loyalty program makes up approximately 30% of sales on average each day and helped the burrito chain to avoid major price hikes, according to the company.

"We have really strong brand loyalty among our members," Nicole West, Chipotle's vice president of digital experiences, told CNBC. "We're really focused on engaging with our members and doing that in a way that really resonates with them."

Driving loyalty is critical for the likes of Chipotle and Starbucks. In the first quarter, Chipotle posted a same-store sales decline for the first time since 2020 and said it saw a "slowdown" in consumer spending. Meanwhile, Starbucks' same-store sales have fallen for five straight quarters.

Cava is bucking industry trends with strong sales growth, but faces Wall Street pressure to maintain its rapid expansion.

As rewards programs pick up steam, more brands are getting creative and moving beyond the value meal.

Cava revamped its rewards program in October 2024 to give customers more flexibility in how they earn and use points. Members can earn points each visit and redeem them for specific items like pita chips or full entrees. The program also includes limited-time offers and in-app challenges. In late March, the company celebrated Pita Day by rolling out a mascot named "Peter Chip" and offering members complimentary pita chips.

"Guests like to see periodic surprises and delight moments where we can reward them with pita chips or other brand offerings," Andrew Rebhun, Cava's chief marketing officer, said

The Cava Rewards program now has more than 7 million members. A new tiered system is expected to launch soon, according to Rebhun.

Chipotle this year launched a seasonal campaign called "Summer of Extras." The campaign is giving away over $1 million in free burritos, encouraging customers to rack up visits and compete to become the top Chipotle visitor in their state.

"We continue to see activations in this program build and excitement and positive reaction across social media from our fans," West said. "We just continue to focus on delivering value to them in ways through programs where customers are given opportunities to 'plus up' their points or earn specific offers by exhibiting specific behaviors."

Salad chain Sweetgreen also retooled its loyalty program this spring, moving away from its tiered subscription program that many consumers found confusing.

"In a challenging industry environment where consumers are making more intentional choices with every dollar, SG Rewards is designed to meet the moment by delivering a meaningful value," Sweetgreen co-founder and CEO Jonathan Neman said on the company's quarterly conference call in May.

Even Starbucks, an established leader in rewards programs, has made changes. In June, the coffee chain ended its 25-star reusable cup bonus and replaced it with double stars across the full purchase. While the change was controversial among loyalists, who claimed the earning potential was reduced, the coffee chain said participation has remained steady.

Of course, giving free rewards comes with tradeoffs. Promotions cut into profits in an industry that faces tight margins in the best of times. Restaurant chains hope those freebies drive longer-term loyalty and spending on full-price items.

Long-term wins

Brands navigating economic pressure are seeing that loyalty programs are helping to drive visits.

Potbelly revamped its loyalty system in early 2024, moving to a coin-based structure that allows customers to redeem rewards faster and across more items. Customers now have access to over 14 menu items through the rewards program. This flexibility has led to more frequent visits, Potbelly's chief marketing officer, David Daniels, said.

"We saw a lift almost immediately in terms of engagement," Daniels said. "The response has been incredibly positive."

Chicago-style eatery Portillo's joined the loyalty game in March with "Portillo's Perks." Instead of using a traditional app, the program utilizes a digital wallet system and focuses on frequency. It tracks how often a customer visits and awards badges as they go.

"It gives flexibility to change how the program is deployed," Garrett Kern, Portillo's vice president of strategy and culinary, said to CNBC. "It doesn't require a redesign and relaunch to an application. It was a great way for us to get the program out there in a branded and easy-to-use way."

The company 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.