In 2026, the dining landscape has become increasingly fractured as the rules of restaurant loyalty begin to break down, according to the 2026 Phygital Index Report from San Diego-based Tillster.
“The boundaries between digital and in-person experiences are fading, and the once-clear distinctions between restaurant categories, from fast food and fast casual to grocery and convenience stores, are dissolving,” Tillster said.
The report also said that fast-food and fast-casual are ceding ground, while grocery and c-stores surge.
This is the eighth annual consumer sentiment report from Tillster, which provides unified commerce solutions for restaurants. It was released on Monday.
Loyalty among diners is plummeting, said Tillster, noting that 45% of consumers say their favorite restaurant has changed in the last year.
“That is a sharp increase from 2025, when one-third of diners said the same, indicating that restaurants can no longer rely on being the ‘go-to’ to secure repeat visits,” Tillster said.
The 2026 Phygital Index Report surveyed 2,144 U.S. diners to better understand ordering habits, dining preferences and evolving expectations.
Sixty-nine percent of diners said they have decreased or maintained their dining-out budgets due to economic conditions, Tillster said. As consumers adjust their spending, they are more discerning in how and where they choose to dine out. Price remains a consideration, but data shows diners are placing greater emphasis on the overall experience. Food quality (45%), convenience (44%) and speed (34%) are the top three factors when diners decide where to eat.
The findings highlight a disconnect in how brands are approaching growth and loyalty strategies, Tillster said.
‘Shifting toward c-stores and grocery options’
“As restaurants continue to prioritize discounting, they’re overlooking the experience factors that actually drive dining decisions,” Tillster said. “As a result, consumers are shifting away from their go-to brands, changing how they spend, and shifting toward c-stores and grocery options, creating one of the most fragmented foodservice landscapes in history.”
As loyalty breaks down, the data reveals how consumers interact with brands and what they expect from each experience, Tillster said.
First, diners are altering how much they spend and where their dollars go. Consumers are dining out less and making more intentional trade-offs in the ordering experience. They’re eliminating delivery, with 61% having abandoned an order due to service fees. In addition, 33% are choosing lower-priced items, while 27% are using loyalty programs more often and 26% are tipping less.
“These shifts show that diners are quick to change brands and behaviors when the experience no longer feels worth it,” Tillster said.
Next, despite increased investments, loyalty program satisfaction dropped. More than one in four, 28%, of diners are dissatisfied with the loyalty programs to which they belong, Tillster said. This is nearly double from 2025, when the figure was 15%. In addition, 39% of diners don’t check loyalty programs consistently, if at all, before deciding where to eat.
“Brands have to deploy more targeted, timely offers to boost engagement, satisfaction and revenue opportunities, particularly as 74% of consumers say these programs drive additional spend,” Tillster said.
Diners expect seamless experiences
Third, diners expect omnichannel experiences to be seamless and personalized. While brands have expanded ordering channels, they’re still struggling to create consistent experiences across every touchpoint—a disconnect that threatens loyalty further as diners diversify how they engage. Sixty-four percent of consumers use self-service kiosks regularly, 75% order via drive-thru at least several times a month and 61% order with a cashier just as often.
“Brands can leverage technology to orchestrate interactions, from connecting loyalty programs across channels to enabling staff with personalized upsells at the register, to bridge the disconnect and create experiences that provide real value,” Tillster said.
Finally, restaurants are losing ground in perceived value in favor of convenience stores and grocery stores. The breakdown in loyalty is amplified when looking at how consumers view traditional foodservice versus c-stores and grocery stores. Twenty-nine percent of diners say they go to fast-food chains less frequently, with even more, 37%, saying the same about fast-casual chains. Conversely, 36% say they go to grocery stores more and 33% say the same about c-stores.
“As nontraditional foodservice players win more dining occasions and beat fast-food and fast-casual on perceived value, restaurants must move beyond discounting and prioritize seamless and personalized experiences to stay competitive,” Tillster said.
Perse Faily, CEO of Tillster, said the findings from this year’s report point to a fundamental shift “in the industry that we’re calling Restaurant 2.0.”
“As consumers place greater emphasis on experience over price, brands have to move away from the ‘tech for tech’s sake’ mindset they’re operating in today,” Faily said. “Restaurant 2.0 is defined by the ability to deliver seamless, consistent experiences across every physical and digital touchpoint, but operators still lack the interconnective systems to truly operate at the level diners expect. That disconnect is what’s driving the erosion of loyalty we’re seeing today.”
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