Name: Consumers send mixed signals in the dining sector
Uploaded: 2025-11-08T09:54:13.823Z
Duration: 3 min 6 s
Description: The dining sector is seeing less younger customers. Low-performing Q3 results from McDonalds, Sweetgreen and Chipotle show that the economy is hitting consumers hard.

The dining sector is seeing less younger customers. Low-performing Q3 results from McDonalds, Sweetgreen and Chipotle show that the economy is hitting consumers hard.

Wall Street

Recent earnings reports from fast-casual dining chains indicate a challenging environment, with Sweetgreen, Kava, and Chipotle all experiencing notable sales declines. Sweetgreen reported a 9.5% drop in same-store sales and cited particular weakness among younger diners, while lower-income consumers are pulling back from quick service restaurants across the sector.

In contrast, Starbucks and Dutch Bros are seeing stronger performance among younger consumers, with more than half of Starbucks' customer base now comprised of Gen Z and millennials. Executives from affected chains are considering strategies focused on value and clearer communication of price points to address shifting consumer behavior, which remains cautious and selective.

Consumers send mixed signals in the dining sector

A sweet green in the sweet red, that's terrible. The salad bowl chain dropping 7 1⁄2% after missing sales and earnings estimates and cutting guidance. The company's seeing particular weakness among younger diners. It and other chains like Kava and CMG Chipotle are down double digits over the last two weeks. For more on these trends, let's bring in Kate Rogers. Kate. Hi, Melissa. You said it was a tough quarter for Sweet Green. Same store sales fell 9 1⁄2%. Company's saying they were flat in September and October, running now at low double digit drops. Sweet Green CEO John Neiman saying last night on the earnings call, quote, I think it's pretty obvious that the consumer is not in a great place overall. You talked about younger consumers. They're eating less at Sweet Green and Kava and Chipotle, all three names seeing big declines this week and on the year. Another takeaway so far from this quarter, lower income consumers pulling away from quick service chains. McDonald's CEO noting a bifurcated consumer with lower income traffic across the sector down double digits. A similar pullback taking place at Wingstop, but then upper income consumers were visiting some of those QSR chains more. Starbucks and Dutch Bros though, bucking that trend with younger consumers. Starbucks building momentum and it's back to Starbucks plans with U.S. comps flat, but positive so far in September and October. More than half of their customer base, remember, Gen Z and millennials. Then finally, Dutch Bros CEO Christine Barone saying, quote, we're seeing really incredible performance out of those younger cohorts. So as I said earlier in the day, it's been really hard to just draw one theme away from this quarter because it's kind of all over the place with the consumer. We're saying they're cautious and a little bit confusing for us to read between the lines. But generally speaking, a little bit more cautious and I would say picking and choosing where it's worth it for them to spend their money right now, Melissa. For chains like Sweet Green, Kava, as well as Chipotle, is there talk of doing more promotional activity in order to get the consumer back, focus on value maybe, or are they just gonna try and ride this out? I think it's a two-pronged answer, Melissa. I think they will kind of ride it out, but then if you ask some of the executives, like I spoke to Chipotle CEO Scott Boatwright, and he says we need to do a better job of kind of getting our message out around value and what the price point actually is because the perception is that it's more expensive than it actually is. So I think not necessarily cutting price, but speaking more to what it actually costs and kind of cutting through some of the chatter that's out there. Sweet Green is a little bit more of a higher price point than a Chipotle. So it depends on the consumer, where you're located, of course, but I think they're gonna be kind of fine-tuning that message as we move ahead.

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