Several major fast-food and fast-casual restaurant chains in recent days have highlighted slumping sales as inflation worsens and hiring slows, reports ABC News.
Executives at Chipotle, Cava, and Sweetgreen say 25- to 35-year-old customers are visiting their stores less frequently as they try to save money.
Chipotle CEO Scott Boatwright last week said customers aged 25-35 are cutting back on dining out because of financial debt, sluggish wage growth, and unemployment.
“We’re not losing them to the competition. We’re losing them to groceries and food at home,” Boatwright told investors at the company’s earnings presentation on Oct. 29.
Cava’s CEO, Brett Schulman, echoed Chipotle’s concerns on a recent earnings call.
“We recognize that today’s environment is creating real pressures for consumers, especially younger guests who are making more deliberate choices about where they spend,” he said.
Sweetgreen’s finance chief, Jamie McConnell, said spending from the 25 to 35 age group, which makes up about 30% of the chain’s consumer base, was down 15% in the recent quarter.
“October is holding flat to September, so we’re running at low negative double digits right now,” she said.
McDonald’s sales have declined due to rising prices making the fast-food chain “too expensive” for budget-conscious consumers.
“We continue to see a bifurcated consumer base with QSR [quick-service restaurant] traffic from lower-income consumers declining nearly double digits in the third quarter, a trend that’s persisted for nearly two years,” McDonald’s president and CEO Chris Kempczinski said during Wednesday’s earnings call.
“In contrast, QSR traffic growth among higher-income consumers remains strong, increasing by nearly double digits in the quarter.”
Wingstop, too, said sales had dropped among Hispanic and low-income customers.
“We shared earlier this year that certain regional pockets which over-index to Hispanic and low-income consumers were experiencing some softness in sales,” CEO Michael Skipworth said on an earnings call last week.
“As we lap two consecutive years of industry-leading same-store sales growth, we saw this dynamic broaden across the industry and within our business to more geographies, as well as to the middle-income consumer in some areas.”
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