American Fast-Casual Chains Struggle as Consumers Shift Spending

Fast-casual dining chains in the United States are grappling with declining sales as younger consumers increasingly opt for budget-friendly meal options. Major players in this sector, including Cava, Chipotle, and Sweetgreen, have reported disappointing earnings, indicating a significant shift in consumer behavior, particularly among those aged 25 to 35. This demographic, which once frequented these establishments for their customizable bowls and salads, is now retreating to home-cooked meals or cheaper fast-food alternatives.

The shift in consumer spending is not merely a passing trend. According to Brian Vaccaro, a restaurant analyst at Raymond James, the softer wage growth affecting lower-income consumers is now also impacting middle-income young professionals. He notes that factors such as ongoing political anxiety and intense competition from fast-food chains offering value meals are contributing to this new consumer landscape.

Sales Decline Across Major Chains

Cava, known for its Mediterranean-style bowls, has seen its stock decline nearly 60% in 2025 after a remarkable 162% increase in 2024. Brett Schulman, CEO of Cava, emphasized during a recent earnings call that the company’s younger customers are facing significant challenges, including the resumption of student loan repayments and a high unemployment rate among Gen Z individuals, which is currently double the national average. Cava’s traffic remained flat for the second consecutive quarter, prompting the company to lower its same-store sales forecast from 4% to 3-4% for the remainder of 2025.

In the fast-casual dining sector, transactions have dropped by 7% since 2019, indicating that consumers are finding these dining options increasingly unaffordable. R.J. Hottovy, a restaurant analyst at Placer.ai, noted that many consumers are choosing to buy groceries instead, seeking more cost-effective solutions. This trend was also highlighted in Chipotle’s recent earnings report, which showed a significant reduction in sales growth for three consecutive quarters, leading to a 50% drop in share prices this year.

Consumer Trends and Corporate Responses

At Chipotle, Scott Boatwright, CEO, reported that younger consumers who constitute about 25% of the chain’s sales have “pulled back meaningfully.” He reassured analysts that the company is still more affordable than its competitors, despite the perception that the fast-casual sector has become too expensive. He maintained that Chipotle’s entry-level price point remains under $10 in most markets, excluding high-cost areas like New York.

Conversely, Sweetgreen, which focuses on salads and warm bowls, has seen its stock plunge by 83% this year, a stark contrast to its nearly 200% increase in 2024. The company’s recent earnings report revealed a 9.5% decline in same-store sales, compounded by a nearly 12% drop in customer visits. CFO Jamie McConnell noted that consumers aged 25 to 35, who represent about 30% of Sweetgreen’s customer base, are under significant financial pressure, resulting in a 15% reduction in their spending. To regain this demographic’s attention, Sweetgreen will begin promoting a 25% increase in protein portions starting this week.

Despite these challenges, analysts remain optimistic about the future of these chains. Vaccaro pointed out that there will always be a demand for high-quality, fresh ingredients at reasonable prices. As the market evolves, these companies may need to adapt their strategies to appeal to a more cost-conscious consumer base while maintaining the quality and variety that initially drew customers to fast-casual dining.