A buyer exits a Cava restaurant in New York Metropolis on June 22, 2023.
Brendan McDermid | Reuters
As some customers pull again on spending amid financial uncertainty, fast-casual restaurant chains are leaning on rewards packages to drag them again in.
Loyalty packages, which provide reductions or added perks for returning prospects, 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 prospects coming again and constructing habits that transcend the occasional coupon.
“In powerful instances, loyalty packages grow to be extra important,” stated Peter Fader, a advertising and marketing professor on the Wharton Faculty on the College of Pennsylvania. “They grow to be a required ingredient to constructing and sustaining relationships.”
Within the 12 months led to Might, the restaurant trade solely noticed month-to-month site visitors improve as soon as, in November, in response to Black Field Intelligence knowledge. As diners go to eating places much less often, gross sales battle. Solely 43% of restaurant manufacturers tracked by Black Field reported same-store gross sales development in Might.
Customers who be a part of loyalty packages go to eating places extra often, making 22% extra visits per 12 months to eateries, in response to Circana knowledge. 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 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 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 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, in response to the corporate.
“We now have actually robust model loyalty amongst our members,” Nicole West, Chipotle’s vice chairman of digital experiences, informed CNBC. “We’re actually centered on participating 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 trade tendencies with robust gross sales development, however faces Wall Road stress to keep up its fast enlargement.
Getting artistic
As rewards packages decide up steam, extra manufacturers are getting artistic and shifting past the worth meal.
Cava revamped its rewards program in October 2024 to offer 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 consists of limited-time provides 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 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 response to 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 referred to as “Summer time of Extras.” The marketing campaign is gifting away over $1 million in free burritos, encouraging prospects to rack up visits and compete to grow to be 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 give attention to delivering worth to them in methods by way of packages the place prospects are given alternatives to ‘plus up’ their factors or earn particular provides by exhibiting particular behaviors.”
Salad chain Sweetgreen additionally retooled its loyalty program this spring, shifting away from its tiered subscription program that many customers discovered complicated.
“In a difficult trade atmosphere the place customers 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 total 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 trade that faces tight margins in one of the best of instances. Restaurant chains hope these freebies drive longer-term loyalty and spending on full-price gadgets.
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 enables prospects to redeem rewards quicker and throughout extra gadgets. Clients now have entry to over 14 menu gadgets by way of the rewards program. This flexibility has led to extra frequent visits, Potbelly’s chief advertising and marketing officer, David Daniels, stated.
“We noticed a elevate 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 an alternative of utilizing a standard 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 would 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 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.
