Rising debt, weak wage growth, and higher living costs squeeze young consumers — dragging down Chipotle, Sweetgreen, and Cava sales.
NEW YORK (November 9, Market Insider) — America’s Gen Z consumers are tightening their wallets, and the nation’s popular fast-casual restaurant chains are feeling the pain.
Cava (NYSE: CAVA), Chipotle (NYSE: CMG), and Sweetgreen (NYSE: SG) — brands that rely heavily on younger, urban diners — all reported sharp slowdowns or outright declines in sales as economic pressures mount on 25- to 35-year-olds.
A Generation Under Pressure
After years of strong spending, younger consumers are now pulling back amid mounting financial stress. Unemployment among Americans aged 20–24 has jumped to 9.2%, more than double the national average of 4.3%. At the same time, student loan repayments resumed in April after a four-year pause, hitting the very demographic that holds the second-highest level of U.S. student debt.
Debt overall is rising fast. The New York Federal Reserve reported in Q3 that student loan balances increased by $47 billion from last year, credit card debt surged $67 billion, and mortgage balances climbed $478 billion — all record highs.
“The macroeconomic headwinds have really impacted that 25-to-35-year-old guest segment,” said Cava CEO Brett Schulman, noting that visit frequency from younger diners has dropped as “cost pressures from around them” build.
Sales Slow, Stocks Slide
Cava’s same-store sales growth plunged to 1.9% year-on-year, down sharply from 18.1% a year earlier. The stock fell more than 7% following the report.
At Sweetgreen, the slowdown was even more severe: same-store sales tumbled 9.5%, reversing last year’s 5.6% gain. CEO Jonathan Neman blamed “lighter spending among younger guests,” especially in high-cost markets like Los Angeles and the Northeast. Sweetgreen shares are down 80% in 2025.
Meanwhile, Chipotle’s CEO Scott Boatwright told investors that the chain is “over-indexed” to a “particularly challenged cohort” — the 25–35 age group hit by unemployment, student loan repayments, and sluggish wage growth. Chipotle stock has fallen more than 50% this year.
Why It Matters
Data from JPMorgan Chase shows workers aged 25–29 are seeing the sharpest slowdown in income growth, while Bank of America found that homeownership among those under 35 remains significantly lower than older generations. Rent inflation, meanwhile, continues to climb at 3.5% annually, further eroding disposable income.
The combination of rising debt, weak wage gains, and higher living costs has forced younger Americans — once the growth engine for trendy dining brands — to cut back on discretionary spending.
“This is the first time we’re seeing Gen Z act like a financially squeezed middle class,” said one market analyst. “It’s bad news for restaurants built on premium-priced fast-casual experiences.”
The Takeaway
Fast-casual chains, long buoyed by millennial and Gen Z loyalty, are now confronting the limits of that model in an era of inflation and student debt.
Unless wage growth rebounds or brands adapt with cheaper menus and loyalty-driven digital offers, the pressure on Gen Z’s wallets could reshape the restaurant industry’s entire growth story.
