SmartSense Report Highlights Key Strategies Restaurants Need to Retain Customers Amid Declining Dining Spend
SmartSense by Digi, a division of Digi International, has released its latest Counter Intelligence Report: State of Fast Casual in 2026, offering a detailed look into how shifting economic realities, evolving food safety expectations, and operational performance are reshaping consumer behavior in the restaurant industry. Based on a survey of 1,000 adults across the United States aged 18 and older, the report challenges the notion that fast casual dining is losing its appeal. Instead, it paints a more nuanced picture: while consumer interest in the category remains strong, financial pressures and rising expectations are forcing diners to be more selective about where and how they spend.
At the heart of the findings is a clear contradiction. On one hand, 70% of respondents say they still enjoy fast casual offerings—particularly customizable, bowl-based meals featuring combinations of grains, vegetables, proteins, and sauces. These options continue to resonate due to their perceived health benefits and flexibility. On the other hand, 66% of consumers report cutting back on dining out overall, signaling that even favored categories like fast casual are not immune to broader economic strain. As a result, brand loyalty is becoming increasingly fragile, with consumers placing greater scrutiny on factors such as food safety, cleanliness, and consistency.
Guy Yehiav, President of SmartSense by Digi, emphasized that while fast casual dining continues to deliver value through convenience and customization, it must now compete in a more cautious spending environment. Consumers are not only tightening their budgets but are also becoming more vocal about the shortcomings they encounter. These insights, he noted, present an opportunity for restaurant operators to refine their offerings and address persistent operational gaps.
Economic concerns are a major driver behind changing dining habits. Nearly six in ten respondents (59%) reported that economic conditions have worsened over the past six months. This perception aligns with broader indicators such as declining consumer confidence and slower hiring trends. Consequently, two-thirds of consumers (66%) say they have reduced their dining-out budgets over the past year. When forced to cut back, diners are scaling down spending across all restaurant segments, though the extent varies by category.
Full-service or sit-down restaurants are the hardest hit, with 78% of consumers saying they reduce spending in this category when money is tight. Fast casual establishments follow, with 69% reporting reduced spending, while quick-service restaurants (QSRs), such as traditional fast-food outlets, see a slightly smaller decline at 58%. Despite these reductions, fast casual dining demonstrates notable resilience, particularly among younger consumers.
Gen Z, often cited as a key demographic influencing dining trends, continues to favor fast casual options even during financial strain. The report reveals that 75% of Gen Z consumers are more likely to choose fast casual over sit-down restaurants when budgets are constrained, and nearly half (49%) say they actually increase their spending in this category under such conditions. In contrast, baby boomers show a more stable but cautious approach. While 46% acknowledge worsening economic circumstances, only 56% report tightening their dining budgets—below the overall average. This suggests that older consumers may have more financial flexibility but remain mindful of value and experience.
Beyond cost considerations, the report highlights growing concerns about food safety and operational standards, which are increasingly influencing where consumers choose to dine. Although fast casual restaurants are popular, many consumers harbor skepticism about their practices. Sixty percent of respondents—and an even higher 68% of Gen Z—believe that fast casual establishments are more likely to cut corners on food safety compared to full-service restaurants. Additionally, half of all consumers think these establishments are more prone to food recalls, a perception that can significantly erode trust.
The consequences of such concerns are severe. Sixty-eight percent of consumers say they would permanently stop visiting a restaurant following a food safety incident. Similarly, 57% would abandon a brand due to inconsistent experiences across locations. Operational inefficiencies also play a role in deterring repeat visits, with 50% citing disorganized staff and 42% pointing to slow service as reasons for not returning.
Despite these challenges, the report identifies clear pathways for building and maintaining customer trust. Consistency, transparency, and a strong focus on cleanliness are critical factors in driving loyalty. Fast casual restaurants rely heavily on repeat business, and the data underscores how important it is to deliver a reliable experience across all touchpoints.
Regular patronage remains strong, with 37% of consumers reporting that they dine at fast casual restaurants at least once a week. However, maintaining this frequency requires meeting heightened expectations. Cleanliness, in particular, plays a pivotal role, with 93% of respondents stating that the condition of dining areas directly influences their perception of food safety. Brand reputation is another key factor, shaping the views of 79% of consumers regarding a restaurant’s safety standards.
Technology is emerging as a powerful tool for reinforcing trust. Sixty-nine percent of consumers say they would be more likely to visit a restaurant that openly communicates its use of technology to ensure food safety. This suggests that transparency around operational practices—such as temperature monitoring, compliance tracking, and quality assurance—can serve as a competitive advantage in a crowded market.
Yehiav noted that increasing regulatory demands and operational complexity are already pushing restaurant operators to prioritize safety and efficiency. The report’s findings reinforce that consumers expect the same level of commitment. Rather than treating compliance and safety measures as routine obligations, restaurants should view them as strategic investments that enhance customer confidence and drive long-term growth.
In conclusion, the fast casual dining sector in 2026 remains resilient but faces a more demanding and value-conscious customer base. While consumers continue to appreciate the category’s convenience and customization, their expectations around safety, consistency, and overall experience have never been higher. For operators, success will depend on their ability to adapt to these evolving demands—balancing affordability with quality, and efficiency with transparency—to secure customer loyalty in an increasingly competitive landscape.
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