Chipotle CEO Scott Boatwright says customers aged 25-35 are cutting back on dining out because of financial debt, sluggish wage growth and unemployment.
"This group is facing several headwinds, including unemployment, increased student loan repayment, and slower real wage growth," Boatwright told investors at the company's earnings presentation Wednesday.
"We're not losing them to the competition. We're losing them to grocery and food at home."
U.S. households earning less than $100,000 a year, which make up about 40% of Chipotle's sales, have pulled back sharply.
"They feel the pinch; we feel the pullback from them as well," Boatwright said.
Chipotle also flagged issues with digital order accuracy, ingredient availability and cleanliness, based on an internal survey. The company is retraining staff and tweaking bonus incentives to bolster customer experience and digital execution.
"Even though Chipotle has long argued it offers strong value given its high-quality ingredients, many consumers aren't buying it," Emarketer analyst Zak Stambor said.
Third-quarter comparable restaurant sales at the burrito chain rose 0.3%, compared with analysts' estimate of a 1.36% rise, according to data compiled by LSEG.
Adjusted earnings per share came in at 29 cents, in line with the estimate, while restaurant- level margin fell to 24.5% from 25.5% a year ago.
The company expects 2025 comparable restaurant sales to decline in the low-single-digit range, compared with prior forecast of about flat.
Less Gen Z and millennial renters are eating out to afford monthly payments, according to a Redfin survey of 4,000 U.S. homeowners and renters conducted in August.
More than 20% reported skipping meals entirely to make ends meet.
Millennials are people born between the early 1980s and mid-1990s. Gen Z refers to the generation born between 1997 and 2012.
Reuters contributed to this report.
Solange Reyner ✉
Solange Reyner is a writer and editor for Newsmax. She has more than 15 years in the journalism industry reporting and covering news, sports and politics.
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