Members of Generation Z and the millennial cohort, once considered enthusiastic patrons of fast-casual restaurants, are increasingly reconsidering their spending habits and reducing how often they dine out. This cautious approach to discretionary spending is beginning to create significant financial ripples across some of America’s most recognizable fast-casual chains, including Chipotle, Cava, and Sweetgreen. During the past two weeks, these three companies released their earnings results, each identifying a strikingly similar problem: individuals aged roughly between twenty-five and thirty-five are visiting their establishments less frequently. The trend reflects a generational tightening of budgets as many younger adults grapple with higher living expenses, slower income growth, and rising economic uncertainty.

Fast-casual eateries—known for their health-conscious, customizable offerings often served in what are colloquially referred to as “slop bowls”—once represented an appealing middle ground between fast food and traditional sit-down restaurants. They catered to consumers desiring convenience alongside perceived freshness, quality, and nutritional value. However, the environment that once fueled their meteoric rise has changed dramatically. Elevated unemployment among young professionals, coupled with shrinking disposable incomes and the return of mandatory student loan repayments, have strained financial flexibility. According to an October analysis from TD Cowen, discretionary spending on dining out tends to be one of the first sacrifices households make when under economic pressure, and this behavioral adjustment is now being felt across the fast-casual sector.

The financial difficulties of these younger diners are compounding broader structural challenges already confronting major restaurant brands. As fast-food competitors such as McDonald’s expand aggressive promotional campaigns and meal deals, they are effectively undercutting fast-casual pricing and positioning themselves as the more affordable choice. Investors have noticed the repercussions of this trend: immediately following earnings announcements, shares of Chipotle, Cava, and Sweetgreen all declined during extended trading sessions. Over the last month alone, Chipotle’s stock value dropped by approximately twenty-six percent, Cava’s by twenty-seven percent, and Sweetgreen’s by twenty-one percent—a clear signal of investor unease regarding the sector’s future performance.

Andrew Barish, a senior equity research analyst at Jefferies, underscored that solving the issue will require strategies far more nuanced than mere price reductions. During a late-October conference call, Chipotle’s chief executive, Scott Boatwright, elaborated that financial stressors such as job instability, heightened loan obligations, and sluggish real wage growth have meaningfully eroded the disposable income of 25- to 35-year-olds. As a result, these customers are not defecting to rival fast-casual competitors but rather gravitating toward grocery stores and home-cooked meals. In his words, “We’re not losing them to the competition—we’re losing them to food at home.” His statement succinctly captures a sentiment echoed across the industry: when consumers begin evaluating every dollar spent, occasional restaurant visits become easily dispensable.

Brett Schulman, the CEO of Cava, echoed similar concerns during his own earnings discussion, describing the current economic climate as one that exerts “real pressures” on consumers—especially younger diners who are becoming distinctly more intentional about how, where, and why they spend. At Sweetgreen, Chief Financial Officer Jamie McConnell revealed that revenue from the chain’s 25- to 35-year-old customer base—representing almost thirty percent of its total clientele—declined by approximately fifteen percent over the recent quarter. McConnell characterized this demographic as being under the “most pronounced pressure” from current economic realities.

Meanwhile, lower-cost restaurant alternatives are capitalizing on this shift in spending power. Barish of Jefferies pointed to relentless promotional strategies from brands such as Chili’s and McDonald’s, which are offering complete meal bundles at prices hovering around ten dollars, placing fast-casual chains in an increasingly untenable competitive position. When Business Insider compared average meal costs last September—using orders that included both sides and beverages—it found stark contrasts: Chipotle meals totaled about nineteen dollars, while those from Cava and Sweetgreen reached close to twenty-nine dollars apiece. For consumers wary of every expense, these gaps can feel insurmountable. Jean-Pierre Lacroix, president of brand strategy firm SLD, observed that customers might be willing to pay a small premium for perceived quality or uniqueness, but that premium must retain a compelling, tangible value proposition. He noted that brands must strike a delicate equilibrium—offering memorable experiences and distinctive flavors while ensuring that pricing does not alienate cost-conscious diners.

Nevertheless, Cava’s Schulman defended his company’s pricing structure, noting that customers can still obtain a fully customized chicken-based bowl with multiple spreads, greens, and grain options for just under thirteen dollars in high-cost markets such as New York City. His point served as a reminder that while perceptions of affordability vary geographically, the chain is not necessarily pricing itself out of reach for all audiences. Even so, analysts and executives agree that pricing adjustments alone will not reinvigorate dwindling enthusiasm among younger guests.

Addressing the Gen Z and millennial slowdown requires a more comprehensive re-evaluation of what modern consumers value beyond simple cost efficiency. Barish emphasized that sustained recovery for fast-casual dining depends on innovation—both in menu offerings and brand engagement. Whether through inventive dishes like Cava’s newly introduced chicken shawarma or through enhanced digital loyalty programs that reward repeat visits, the aim should be to reignite excitement and emotional connection. As Barish articulated, “value” is a multifaceted concept that encompasses not just price but also quality, customization, service, and ambiance—all dimensions that distinguish a truly well-executed fast-casual experience.

In response to these headwinds, a Chipotle spokesperson told Business Insider that the company is actively exploring fresh and inventive ways to highlight its value proposition. Efforts currently under consideration include refining in-store operations for greater efficiency, expanding and diversifying menu options, and strengthening the power of its rewards program to encourage habitual dining. Sweetgreen’s CEO, Jonathan Neman, likewise announced an ambitious turnaround plan earlier this year, promising recipe improvements, portion increases of nearly twenty-five percent for proteins such as chicken and tofu, and exclusive discounts for loyalty members. Despite these proactive measures, representatives from Cava and Sweetgreen declined further comment on their strategic responses when approached by Business Insider.

Collectively, these developments paint a portrait of an evolving dining landscape defined by shifting priorities among younger consumers. For Gen Zers and millennials, convenience, health, and sustainability once guided eating-out decisions, but economic necessity is now reshaping those preferences toward meals prepared at home. As the restaurant industry grapples with this transformation, fast-casual chains find themselves at a crossroads, challenged to redefine value in an era when financial restraint dictates culinary choices.

Sourse: https://www.businessinsider.com/chipotle-cava-sweetgreen-genz-millennials-eating-out-less-sales-earnings-2025-11