The CEO of Chipotle, Scott Boatwright, has raised concerns about the financial struggles of younger Americans. He says that Gen Z and millennial customers are eating out less often not because they’ve lost interest in Chipotle, but because they simply can’t afford it anymore.
Boatwright explained during the company’s recent earnings call that customers aged 25 to 35 are facing serious challenges such as unemployment, student loan payments, and weak wage growth. “We’re not losing them to other restaurants,” he said. “We’re losing them to grocery stores and home-cooked meals.” Around 40% of Chipotle’s customers earn less than $100,000 a year, and many of them have been cutting back as prices rise. “They feel the pressure and we feel it, too,” Boatwright added. Because of this slowdown, Chipotle has now reduced its sales forecast for the third quarter in a row. Revenue and restaurant traffic both declined by about 0.8%, marking the company’s third consecutive dip.
A “Two-Tier” American Economy
Chipotle isn’t the only company noticing this shift. Other fast-food giants like McDonald’s have also talked about what they call a “two-tier economy.”
McDonald’s CEO Chris Kempczinski recently told CNBC that while higher-income Americans (those earning over $100,000 a year) are still spending freely, middle and lower income customers are cutting back significantly. “If you’re upper-income, things are good,” he said. “But for everyone else, it’s a different story.” Many restaurants are trying new ways to attract Gen Z customers from McDonald’s adult Happy Meals to Taco Bell’s customizable drinks. Chipotle has tried to do the same with limited-edition sauces like Adobo Ranch and Red Chimichurri. According to Boatwright, “Over 90% of Gen Z consumers say they’d visit a restaurant just to try a new sauce.”
Why Young Americans Are Eating Out Less
The affordability crisis is reshaping how younger people eat. Many Gen Z diners are finding creative ways to save money such as splitting appetizers, ordering kids’ meals, or skipping restaurant visits altogether. A survey by Redfin found that 40% of Gen Z and millennial renters in the U.S. have cut back on dining out just to afford rent and bills.
Over 20% said they even skip meals sometimes to make ends meet. Recent data backs up Boatwright’s concern. A FICO report revealed that Gen Z credit scores have dropped more than any other generation since 2020, partly due to the return of student loan payments.
On top of that, housing prices remain high, and job opportunities for young workers have slowed down. According to a new JPMorganChase Institute report, Americans aged 25–29 saw the weakest income growth in the last decade.
The unemployment rate for 16–24-year-olds is about 10.5% nearly triple that of older generations. Experts say this generation is also facing a new challenge: a “low-fire, low-hiring” labor market. With fewer job openings and fears about AI replacing entry level roles, many Gen Z workers are missing out on opportunities to switch jobs and increase their pay. George Eckerd, director of market research at JPMorganChase, summed it up well: “Young people are struggling to climb the career ladder and without that growth, it’s harder to buy homes, build savings, or even enjoy a simple meal out.”
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