The news: Loyalty programs helped lift Q1 2026 growth for brands across restaurants, airlines, and retail.

• Chipotle said loyalty enrollment grew about 25%, while loyalty as a percent of sales rose 3 percentage points to 32%.
• Taco Bell cited a 30% YoY increase in loyalty sales.
• Advance Auto Parts said a new DIY loyalty program drove higher member sign-ups than its replacement and more transactions.
• Southwest Airlines said its Rapid Rewards enrollments rose 37% YoY as tier status earners increased 62%.
• Ulta Beauty’s rewards program increased to nearly 47 million members, up 4% YoY.

Why it matters: Brands are changing how they use loyalty, leaning on these programs more heavily as consumers grapple with rising costs. Rather than treat rewards programs as a retention tool, companies are using them to identify customers, drive repeat visits, personalize offers, and spur spending. Ulta said it’s using loyalty data to improve personalization, replenishment prediction, and cart conversion.

Converting casual consumers. Companies are using loyalty programs to create continuous customer relationships.

• Chipotle’s loyalty revamp focused in part on in-store acquisition, where the company sees room to draw restaurant traffic that isn’t yet tied to an account.
• American Airlines used changes to its app experience and member perks to make enrollment more seamless and strengthen direct ties with travelers, per CX Dive.

Driving frequency and spending. For many companies, loyalty’s value lies in changing customer behavior after enrollment.

• Chipotle said its Q1 growth reflected gains in active members and more frequent visits among existing ones.
• Taco Bell credited its loyalty program with getting consumers to engage with the brand more often.

Implications for brands: Higher costs are eroding consumer buying power, and loyalty programs give brands a way to stimulate demand. Rather than depend solely on blanket discounting, companies can use rewards, perks, and tailored offers to encourage repeat visits.

That may be especially effective for restaurants, since a recent Alchemer quick service restaurant (QSR) study shows discounts and free items are the biggest sign-up drivers for loyalty members.