As the cost of fast food rises, young adults are scaling back on their expenses, prompting restaurant chains to vie for their business with discounts and special offers. Price increases have deterred individuals like Fatima Abdul Razzaq, a second-year electrical engineering student at Toronto Metropolitan University, who finds dining out more costly and inconvenient than before. Marwan Al Kharrat, a fellow student at TMU, echoed this sentiment, expressing that spending at least $15 for a meal is unsustainable and unaffordable.
A recent survey revealed that three-quarters of Canadians are dining out less frequently due to the escalating cost of living, with the number rising to 81 percent among individuals aged 18 to 34. This trend poses challenges for major chains as they strive to retain the loyalty of the next generation of customers, with some already witnessing a decline in sales. Despite Chipotle’s historical appeal to young patrons, the brand is encountering difficulties attracting Gen Z customers.
Chipotle’s Chief Executive, Scott Boatwright, suggested during a recent earnings call that the slowdown in sales, particularly in the U.S., could be attributed to factors such as higher unemployment rates, sluggish wage growth, and increased debt. As a result, Chipotle revised its sales forecast downwards for the third time this year, anticipating continued reluctance among customers, especially those earning less than $100,000 annually, to dine out into early 2026. McDonald’s is also bracing for reduced sales from low-income consumers in the upcoming year, according to CEO Chris Kempczinski.
Rising costs of ingredients like ground beef have contributed to pricier menu items in fast-food establishments. This inflationary trend, coupled with economic uncertainties and tariff implications, is prompting consumers to reassess their spending habits. To counter these challenges, some brands are aggressively promoting meal deals and specials to attract cost-conscious customers successfully.
Amidst this landscape, the grocery store emerges as a formidable competitor for fast-food chains, with many young adults opting for home-cooked meals or snacks over dining out. For students like Zain Matadar and Nathan Liu at Toronto Metropolitan University, preparing meals at home has become a financial necessity. As the industry navigates these shifts in consumer behavior, the focus remains on appealing to Gen Z and Gen Alpha consumers to secure their share of spending in the coming years.