Unlocking Economic Insights: What Fast Food Trends Reveal About Our Economy

For many Americans, cutting back on dining out is a clear sign of financial stress, especially for those in lower- and middle-income brackets. When they do eat out, they are opting for cheaper choices.

This trend is evident in restaurant sales. Recent data shows that between January and March of this year, Americans consumed one billion fewer meals at restaurants compared to the same period last year, according to market research firm Circana.

Chains like Cava and Sweetgreen, seen as too pricey for everyday meals, have noticed the impact first-hand. Cava initially saw strong sales growth but experienced a drop to just 2.1% in the second quarter. Sweetgreen faced a significant 7.2% decline during the same period, while Chipotle dropped 4%. Analysts note that these mid-range chains struggle as they can’t compete with fast-food deals, yet they also lack the high-end appeal to justify their prices.

Cava’s CFO, Tricia Tolivar, highlighted consumer confusion, saying, “There’s a fog for consumers where things are changing constantly.” This is echoed by Sweetgreen CEO Jonathan Neman, who noted a more cautious consumer mindset since April—a time that coincided with increasing economic unease surrounding tariffs.

Chipotle’s COO Scott Boatwright acknowledged the rise of cheaper competitors, noting that many customers are drawn to budget options like snack meals or $5 deals.

Amid this slowdown, the U.S. economy is showing signs of strain. In July, inflation hit 2.7%, with core inflation soaring to 3.1%. Job growth is slowing, and renewed tariffs are pushing prices higher. Todd Belt, a professor at George Washington University, explained that cutting back on restaurant spending is one of the first signs of financial strain, pointing out that families are making tough choices daily.

Recent findings from the University of Michigan reflect this cautious outlook. While consumer sentiment rose slightly to 61.7 in July, it remains significantly lower than last year, especially regarding long-term expectations.

Fast-food visits, meanwhile, declined 2.3% in the second quarter, impacting chains like IHOP and Wendy’s. Sally Lyons Wyatt, a Circana advisor, pointed out that consumers are currently very budget-conscious, which could change only when economic conditions improve.

On the flip side, some brands are thriving by focusing on value. Domino’s, for instance, saw a 5.6% sales increase, while McDonald’s boasted a 2.5% rise, thanks to value-focused promotions like a $5 combo meal. McDonald’s CEO, Chris Kempczinski, emphasized the importance of appealing to low-income consumers.

Social media reactions show that many customers are frustrated by rising prices. One user shared, “Sweetgreen charged extra for everything. At $16, I might as well go to a real restaurant.” Such feedback reveals the growing disconnect between consumer expectations and restaurant pricing.

In response, some chains are making adjustments. Cava is rapidly growing its loyalty program, while Sweetgreen has increased portion sizes and introduced exclusive deals. Still, most executives recognize that macroeconomic factors mainly drive their challenges.

Chipotle’s Boatwright remarked that the current environment centers on value—the low-income consumer is more focused on prices than ever. The outlook remains cautious, as economic pressure weighs heavily on dining choices.



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