A buyer exits a Cava restaurant in New York Metropolis on June 22, 2023.
Brendan McDermid | Reuters
As some shoppers pull again on spending amid financial uncertainty, fast-casual restaurant chains are leaning on rewards applications to tug them again in.
Loyalty applications, which provide reductions or added perks for returning prospects, have transitioned from being a pleasant bonus for eating places to a must have. As cost-cautious diners prioritize worth, manufacturers like Chipotle, Starbucks, Cava and others are using rewards to maintain prospects coming again and constructing habits that transcend the occasional coupon.
“In robust occasions, loyalty applications develop into extra important,” stated Peter Fader, a advertising professor on the Wharton Faculty on the College of Pennsylvania. “They develop into a required ingredient to constructing and sustaining relationships.”
Within the 12 months resulted in Might, the restaurant trade solely noticed month-to-month site visitors enhance as soon as, in November, based on Black Field Intelligence knowledge. As diners go to eating places much less continuously, gross sales battle. Solely 43% of restaurant manufacturers tracked by Black Field reported same-store gross sales progress in Might.
Shoppers who be part of loyalty applications go to eating places extra continuously, making 22% extra visits per 12 months to eateries, based on Circana data. Additionally they frequent the manufacturers that they belong to at twice the speed of nonmembers, the market analysis agency discovered.
Espresso big Starbucks reported 34.2 million energetic 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 related 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 energetic 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, based on the corporate.
“Now we have actually robust model loyalty amongst our members,” Nicole West, Chipotle’s vice chairman of digital experiences, advised CNBC. “We’re actually targeted on participating with our members and doing that in a approach that basically resonates with them.”
Driving loyalty is important 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 consumer spending. In the meantime, Starbucks’ same-store sales have fallen for 5 straight quarters.
Cava is bucking trade tendencies with strong sales growth, however faces Wall Avenue strain to keep up its speedy growth.
Getting inventive
As rewards applications choose up steam, extra manufacturers are getting inventive and transferring past the worth meal.
Cava revamped its rewards program in October 2024 to present prospects extra flexibility in how they earn and use factors. Members can earn factors every go to and redeem them for particular gadgets 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 prefer 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 officer, stated
The Cava Rewards program now has greater than 7 million members. A brand new tiered system is anticipated to launch quickly, based on Rebhun.
Clients order meals at a Chipotle Mexican Grill restaurant on April 26, 2023 in Austin, Texas.
Brandon Bell | Getty Photos Information | Getty Photos
Chipotle this 12 months launched a seasonal marketing campaign called “Summer of Extras.” The marketing campaign is freely giving over $1 million in free burritos, encouraging prospects to rack up visits and compete to develop 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 by applications the place prospects 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, transferring away from its tiered subscription program that many shoppers discovered complicated.
“In a difficult trade atmosphere 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 applications, 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 lowered, the espresso chain stated participation has remained regular.
In fact, giving free rewards comes with tradeoffs. Promotions lower into earnings in an trade that faces tight margins in the very best of occasions. Restaurant chains hope these freebies drive longer-term loyalty and spending on full-price gadgets.
Lengthy-term wins
Manufacturers navigating financial strain are seeing that loyalty applications are serving to to drive visits.
Potbelly revamped its loyalty system in early 2024, transferring to a coin-based construction that enables prospects to redeem rewards sooner and throughout extra gadgets. Clients now have entry to over 14 menu gadgets by the rewards program. This flexibility has led to extra frequent visits, Potbelly’s chief advertising officer, David Daniels, stated.
“We noticed a raise virtually instantly by way of engagement,” Daniels stated. “The response has been extremely constructive.”
Chicago-style eatery Portillo’s joined the loyalty sport 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 alter how this system is deployed,” Garrett Kern, Portillo’s vice chairman of technique and culinary, stated to CNBC. “It does not require a redesign and relaunch to an utility. It was a good way for us to get this system on the market in a branded and easy-to-use approach.”
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.