By Heather Haddon

An uncertain U.S. economy is catching up to younger Americans -- and Chipotle.

The Mexican-inspired chain has spent years cultivating a younger clientele, pitching its burritos and bowls as nutritious, protein-packed meals for gym bros and healthy eaters. Chipotle Mexican Grill sponsors videogame competitions, and some dedicated fans dub themselves "Chipotle Boys."

Millennials and Gen Zers have helped power Chipotle's sales despite rising menu prices and slowdowns at rival chains. In recent months, though, a harsher economic reality has set in: Rising student-loan payments, stagnant wage growth and rising health-insurance costs have bumped burritos down younger consumers' priority lists.

"They're just eating with us less frequently, and they're eating at home more often," Chipotle Chief Executive Scott Boatwright said in an interview.

One is Sean Chopra, a 23-year-old law-school student at the University of California, Los Angeles. Chopra typically stopped at Chipotle several times a week for rice, bean, chicken and corn bowls, but lately decided he could make more Mexican-style food at home.

"It isn't that difficult to replicate what you get there," Chopra said. He has cut back his Chipotle habit to twice a month.

Chipotle said last week that its customer traffic slid over the three months ended Sept. 30, and for a third consecutive quarter the company cut its forecast for same-store sales growth. Consumers from 25 to 35 years old, who account for roughly a quarter of Chipotle's sales, are pulling back on visits, Boatwright said.

The company's shares have swooned since the Oct. 29 report and are down about 47% so far this year. Other fast-casual restaurant stocks, including Cava and Sweetgreen, also declined ahead of their own earnings reports scheduled for the week ahead.

Thrifty eaters

Eating out less is one way young Americans are looking to save. More than half of Gen Z respondents, or those in their teens and 20s, cited restaurants as an area of spending where they planned to cut back in the next six months, according to an online survey of 1,000 young people by accounting firm PricewaterhouseCoopers.

That is where Chipotle's strength with younger consumers has become a vulnerability. Market-research firm Numerator said that millennial and Gen Z members account for a higher proportion of consumers at Chipotle than many other restaurant chains.

Jack Saia, a 21-year-old senior at Massachusetts' Bentley University, said he still goes to Chipotle but feels increasingly budget-conscious. Saia said he is looking for a job and, given the tough labor market, many of his friends also are counting their pennies.

"This is directly linked to less spending among people my age," said Saia, who typically orders a bowl with white rice, chicken, queso and pico de gallo. "There is more thought behind small decisions like eating out."

Chipotle rapidly raised menu prices after the Covid-19 pandemic, pointing to growing costs for food and labor. While other chains lost traffic, Chipotle until recently had hung on to many of its customers, who tend to earn higher incomes than fast-food regulars.

Executives said last week that some eaters might think Chipotle's prices are higher than they are -- in the $15 neighborhood, versus the $10 price point the chain said is more common. Still, Chipotle plans to step up digital deals and avoid steep price hikes.

Kemari Ombonga, a 32-year-old San Francisco resident, said he has gotten more judicious about his Chipotle orders, and online coupons for free guacamole or drinks are mandatory.

"I'm not getting double meat anymore," said Ombonga, who typically orders a chicken burrito with guacamole and toppings.

Push and pull

Some of Chipotle's younger customers are spending their food dollars elsewhere. Sit-down restaurants such as Chili's are drawing more customers with their deal s and generating buzz online.

Last year, teens posted TikTok videos pulling apart Chili's fried cheese planks, helping bring in crowds of new customers that are still showing up, said Kevin Hochman, chief executive of parent company Brinker International.

"I know a lot of folks have said, 'Hey, that's going to peter out.' We really haven't seen that," Hochman said during an investor call last week.

Visits to casual-dining restaurants rose 1.1% from the start of the year through Oct. 5, while traffic to fast-casual chains such as Chipotle declined 1.4%, according to market-research firm Black Box Intelligence.

Boatwright said Chipotle is stepping up promotions aimed at younger consumers, including a rewards program focused on college students called Chipotle U. Chipotle in recent months has also rolled out deals through digital games, including awarding food for correctly answering Chipotle trivia.

Spencer Winston, 26, a self-described "Chipotle Boy," has a desk drawer stuffed with the chain's napkins. He said the recent deals have kept him going back for his preferred order of brown rice, black beans, chicken and mountains of toppings.

"It honestly felt like Chipotle was paying attention to its regulars," said Winston, a development manager at a hotel company in Raleigh, N.C.

Write to Heather Haddon at heather.haddon@wsj.com

(END) Dow Jones Newswires

November 03, 2025 05:30 ET (10:30 GMT)

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