How Cava, Chipotle, Sweetgreen are trying to lure diners back to bowls

Long lines still form outside at 12:30pm in midweek office days in midtown Manhattan chipotle, JavaneseAnd sweet green. Fast-casual bowls remain the defining lunch of the hybrid work era; something that is quick to carry, easy to carry eating at the tableand familiar enough to order without thinking. But this apparent popularity sits alongside a tougher financial reality in chain restaurant companies, which are now booming.

Chipotle, Cava and Sweetgreen reported decreased traffic and fewer visits from younger consumers, especially in a more strained economic environment highlighted by food inflation and job insecurity. According to Datassential, almost two-fifths of consumers think fast-casual is now too expensive; That finding aligns with comments from Chipotle executives, who said on recent earnings that they were struggling with the perception that their menu was more expensive than it actually was. The battle for the bowl economy comes at a time when Gen Z unemployment is higher than the national average.

“We tend to be younger and a little bit over-indexed relative to that group relative to the broader restaurant industry,” Chipotle CEO Scott Boatwright said in its latest earnings call. He noted that budgets were tightening, saying the group had become more cautious about discretionary spending and that meant fewer weekday lunches.

Cava reported similar earnings, with CEO Brett Schulman noting recent earnings appeal to the “younger group, 25 to 35-year-olds.”

Higher unemployment, student loan repayment and tariffs paint a picture of young restaurant customers thinking carefully about every purchase. As dining continues to be disrupted, fast-casual restaurants are implementing new strategies to attract customers, placing greater emphasis on loyalty programs and highly interactive promotions. Two-thirds of consumers say promotions influence their decisions, and loyalty programs appeal to more than a third, according to Datassential.

Chipotle shifted its focus more to loyalty as sales began to stall over the summer, and now it’s doubling down on deals to attract customers back. All three fast-casual chains introduced a new product. various campaigns The period has included the latest weak results since the end of the third quarter on September 30.

Chipotle was introduced in October month-long rewards program It depends on purchasing an entrée and scanning it in the app. Starting at 15.00 on Halloween, every visitor who wears a costume will receive a prize. $6 entry. Capitalizing on the bowls’ popularity on social media, Chipotle has added a Halloween TikTok challenge This year, he did something he hasn’t done since 2020, which was another period of uncertainty for the restaurant industry.

Such work is planned to continue throughout the holiday season. Chipotle announced a buy-one-get-one-free entree offer in-restaurant from 4 p.m. to close on Wednesday, Nov. 26, noting that it’s a “popular time for young adults to reconnect with friends.” For the holiday shopping season’s Cyber ​​Weekend, Chipotle is offering a $0 delivery fee on orders placed through the Chipotle app and Chipotle.com. It also launched a new Chipotle U Competition Week in university towns.

“They drive new sign-ups at scale, re-engage former members, and increase frequency among existing members. Our results show that when we create engaging experiences for our rewards members, they come more often and their spend increases,” Chris Brandt, Chipotle’s President and Chief Brand Officer, told CNBC. he said.

“It’s all about increasing frequency, but also creating a level of community engagement with the brand, which helps the brand in the long run,” said Danilo Gargiulo, senior research analyst at Bernstein.

Cava revamped its loyalty program in October and is testing new formats for digital demand. with the new tiered status system. According to Datassential, fast casual now has a 59% loyalty adoption rate; This is one of the highest rates among restaurant segments, and how these programs are designed becomes increasingly important.

Wall Street is warming to loyalty efforts, to a limit

Wall Street is bullish on the concept of driving loyalty, but is currently skeptical that it can make a big difference. “This is a unique loyalty structure that we haven’t seen anywhere else in the world. We’re excited about what this could do for the business. But, you know, we’re not modeling any benefits,” Andrew Charles, senior research analyst at TD Securities, told CNBC. “Gen Z is the No. 1 thing that’s changed in recent months. This weight is making the industry and traffic worse,” Charles said.

The extent to which chains will increase brand awareness has become more controversial with Cava launching its own brand. product line A collection debuted earlier this month that includes graphic T-shirts, hoodies, hats, socks and the brand’s food dictionary, the “Hot Harissa Hat” and “Extra Pickled Onion Tee.”

Wall Street was not impressed. “This is not a meaningful expansion. It’s more of an extension of the brand halo. Because companies that work for the long term are companies that create a culture, but not like this,” Gargiulo said.

Sweetgreen took a different approach to win back customers after quarterly underperformance in key markets like the Northeast and Los Angeles and declining spending among younger guests. introduced a macronutrient tracker A Sweetgreen Spokesperson said it allows guests to see a full breakdown of protein, carbohydrates and fats, as well as calories, alongside menu items and specialty bowls, and protein remains one of guests’ top priorities. This fall, the chain launched Power Max Protein Bowl Servings of chicken and tofu increased by 25%, with 106 grams of protein.

But Sweetgreen has bigger problems than the current decline in young consumers’ financial confidence, thanks to its long-standing failure to find a profitable business model.

Wall Street analyst Alton Stump of Loop Capital Markets thinks the selloff in Chipotle shares is an opportunity. He maintains a buy rating on the stock and wrote in a recent report that Chipotle’s third-quarter results did not justify the sharp selloff that has sent its shares down nearly 50% year-to-date. He wrote that in his firm’s conversations with investors, the claim that the brand began losing young core customers in the third quarter was a “growing narrative” and that many investors expected customer losses to continue at least in the short to medium term. But Stump added that while the narrative “undoubtedly has some merit,” he thought it was “exaggerated.”

Other bowling bulls are currently lagging behind. While Cava shares have lost nearly 60% of their value since the beginning of the year, UBS senior research analyst Dennis Geiger wrote in a recent report that it remains an “compelling” growth story with diverse menu offerings, potential sales catalysts and attractive unit yields. However, its report concluded that more evidence was needed that the previously high growth rate could be regained in a difficult economic environment. UBS has a hold rating on the stock and expects a clearer picture of its performance in 2026.