By Evie Liu

The end of the government shutdown would bring federal employees back to Washington, D.C., and boost sales for restaurant chains with a high share of their stores in the region.

The House of Representatives has a vote tonight to fund the government and end the shutdown.

In a Wednesday note, Citi analyst Jon Tower noted that Cava, a Mediterranean fast-casual chain, has nearly 16% of its restaurants in Washington, D.C., Maryland, and Virginia, while salad chain Sweetgreen has about 12% of its restaurants in the area.

In comparison, larger fast-food chains like McDonald's, Domino's Pizza, Burger King, and Taco Bell all have less than 6% footprint exposure to those markets, according to Citi's research.

The government shutdown has sharply reduced lunchtime traffic from federal employees. Moreover, with paychecks on hold during the shutdown, those workers faced added financial strain and have cut back further on dining out.

"As paychecks stopped going out to government workers, we have seen some softness creep in," said Cava CEO Brett Schulmann in the latest earnings call, but noting that it's nothing "acute or severe at this point."

The end of the government shutdown would be good news for the fast-casual chain. "We expect Cava's sales to improve off lows as the U.S. government likely reopens in the coming weeks," wrote Citi's Tower on Wednesday.

Fast-casual chains like Cava are seeing a slowdown in sales trends after many quarters of door-busting growth. In the latest quarter ended in September, same-restaurant sales at Cava increased 2% from a year ago. The growth was primarily driven by higher menu prices, however, as guest traffic remained flat.

At Sweetgreen, existing restaurants saw a 9.5% year-over-year sales drop in the September quarter. Total revenue slipped 0.6% even as the chain opened 35 new restaurants. Cava and Sweetgreen stocks have tumbled 57% and 83% year to date, respectively.

A revival of the D.C. market could help, but it would take much more for the stocks to come back.

Write to Evie Liu at evie.liu@barrons.com

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November 12, 2025 15:48 ET (20:48 GMT)

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