If your local Chipotle or CAVA feels quieter during lunch, you’re not imagining things. Gen Z is opting for grocery bags over casual dining. Scott Boatright, CEO of Chipotle, noted that younger customers, particularly those aged 25 to 35, are “facing headwinds” and eating out less often. It seems that the rising prices of meals—like a $15 burrito bowl—are becoming too much for this generation, especially when combined with escalating student loan payments and credit card debt.
Fast-casual dining, once seen as an affordable option, is now treated as a luxury. Boatright mentioned they’re not losing young customers to rival chains; rather, they’re seeing them cook more at home. The very folks who once drove the fast-casual trend are now choosing to prepare meals instead.
At CAVA, CEO Brett Schulman has observed similar trends, saying younger guests are making “more prudent choices” regarding spending. While CAVA bowls typically cost between $11 and $13, it still feels pricey, especially when money is tight. Schulman described the current economy as a “fog,” suggesting that foot traffic in fast-casual places is waning.
Gen Z is caught in an economic fog
This generation isn’t lazy or picky; they’re simply in a tough spot. Many are returning to student loan payments, and over half haven’t even started making those payments. Credit card debt has reached an all-time high, and long auto loan terms are becoming the norm. With rents and food prices climbing, real wage growth isn’t keeping up.
Young consumers once led trends by paying extra for organic or upscale meals. Now, many find themselves financially squeezed. Even those with decent salaries are seeing their disposable income evaporate due to debts and rising costs.
A macro shift hits Main Street
This situation extends beyond just burrito bowls. Consumer behavior is shifting nationwide, as young Americans decide they’re done paying $20 for a meal.
Fast-casual brands previously thrived on speed and perceived value, but now many are gravitating back towards lower-cost fast-food options and discount grocery stores. Chains like McDonald’s and Chili’s are gaining market share as families and individuals seek value. Buyer habits are changing; the same amount you’d spend on a single meal can cover multiple homemade dinners or a week’s supply of frozen meals.
What does this mean for CAVA and Chipotle?
For restaurant owners, the younger consumer base that once drove fast-casual dining is diminishing. If your establishment appeals primarily to 25- to 35-year-olds, it may be time to reconsider pricing and promotions. While people still enjoy dining out, they’re increasingly focused on value.
Boatwright stated Chipotle won’t chase customers by lowering costs. That may seem wise, but it’s risky. Holding prices steady when consumers feel financially pressed could backfire significantly.
Are Gen Z anti-burritos?
Gen Z isn’t against burritos; they’re simply realizing that indulging in them isn’t worth the financial stress. As inflation impacts wages and debt accumulates, many small luxuries are being sacrificed. This shift reflects a broader economic disconnect for the generation, which also shapes their voting habits and priorities for upcoming elections.
Ultimately, if young diners aren’t hitting the fast-casual spots, it’s not necessarily due to preference. It’s about the hefty price tag attached to their meals. In a climate where every penny counts, it’s clear: Gen Z is making choices that align with their financial realities.
