WSJ What’s News – Episode Summary

Episode Title: Are We in a Fast-Casual Restaurant Recession?
Date: November 16, 2025
Host: Caitlin McCabe
Guests: Heather Haddon (Restaurants Reporter), Matt Grossman (Economics Reporter)

Overview:

This episode explores the decline in popularity of fast-casual restaurant chains like Chipotle, Sweetgreen, and Cava among young Americans, particularly Gen Z and Millennials. The discussion delves into the economic pressures facing these age groups, the impact on restaurant sales, and what this trend indicates about broader consumer behavior and the U.S. economy.

Key Discussion Points & Insights

1. The Rise and Fall of Fast-Casual (00:34–01:40)

• Background:
  Over the past decade, fast-casual chains became dominant, particularly among younger consumers seeking "build-your-own" meals with fresh ingredients, willing to pay a premium over traditional fast food (00:34).
• Current Shift:
  Recent financial data shows a downturn in visits from younger customers (01:10).

“Chains like Chipotle, Sweetgreen and Cava are falling out of favor with Gen Z.”
— Caitlin McCabe (00:37)

2. Economic Pressures on Young Consumers (03:09–04:27)

• What Executives are Saying:
  Younger consumers (25-35) are being blamed for slower sales. Factors cited include return of student loan payments, rising insurance and childcare costs, along with flat wage growth (03:09).
• Not a Total Abandonment:
  Young adults aren’t completely giving up these brands but are visiting less frequently.

"They're not abandoning the brands totally, but they're just not coming in as much as they were."
— Heather Haddon (03:33)

• Labor Market Context:
  Companies are cautious about hiring and investment, which disproportionately affects younger job seekers (03:51).

"Younger people are having a tougher time now finding those opportunities than certainly they were a few years ago.”
— Matt Grossman (04:18)

3. Effects on Restaurant Performance and Stocks (04:27–05:48)

• Earnings Impact:
  • At Chipotle, 25–35-year-olds represent 25% of sales.
  • Same-store sales declines and reduced future outlooks at Chipotle and Sweetgreen (Sweetgreen down 9%) (04:42).
  • Stocks have taken significant hits; some see opportunity, but overall sector is weak (05:10).

“In general, restaurant stocks have just been hammered this year… they're viewed as discretionary spending.”
— Heather Haddon (05:29)

4. Is This Cyclical or Structural? (05:48–06:43)

• Uncertain Outlook:
  Debate whether this trend is part of a normal cycle or a structural change due to factors like AI-driven entry-level job shifts (05:59).

“Is that because companies are starting to experiment with using artificial intelligence to do some of the entry-level functions that these young people might have done in the past? That's a question that economists feel like they do not have good answers about yet.”
— Matt Grossman (06:29)

5. Broader Consumer Trends (06:43–08:00)

• Spending Across Other Categories:
  Credit card data shows small declines across travel, lodging, and entertainment—generally 3–5% down year-over-year (06:51).
  • Some exceptions: Delta Airlines reports ongoing strength among younger travelers; Six Flags sees increased price sensitivity (07:35).

6. The Economic Significance of Young Adult Spending (08:49–09:26)

• Impact on Economy:
  While not the largest group, spending by 20- and 30-year-olds is volatile and can swing quickly with changes in personal financial health.

“Young people's spending can swing a lot faster.”
— Matt Grossman (09:15)

7. Pullback or Preference Shift? (09:26–10:39)

• Data and Marketing:
  Chains may be latching onto the “25–35 year-old” explanation, but advanced consumer data confirms a slowdown.
  • Companies are deploying digital engagement tactics (games, trivia, student programs) to win back young spenders.
  • Market saturation and increased at-home cooking may also play a role.

8. Company Responses & the Search for New Growth (10:39–11:29)

• Strategic Shifts:
  • Expansion into overseas markets (Middle East, Mexico) seen as new frontiers.
  • Increased investment in digital/social media marketing—comes with higher costs and organizational challenges.

"We've created a whole in-house social media team because we realized that's where consumers are and that's where you have to advertise and figure things out."
— Heather Haddon, quoting a CEO (11:11)

Notable Quotes & Memorable Moments

• “Chains like Chipotle, Sweetgreen and Cava are falling out of favor with Gen Z.”
  — Caitlin McCabe (00:37)
• “They're all blaming 25 to 35 year olds for a slowdown in their sales.”
  — Heather Haddon (03:09)
• "Younger people are having a tougher time now finding those opportunities than certainly they were a few years ago.”
  — Matt Grossman (04:18)
• “In general, restaurant stocks have just been hammered this year… they're viewed as discretionary spending.”
  — Heather Haddon (05:29)
• “Is that because companies are starting to experiment with using artificial intelligence... that's a question that economists... do not have good answers about yet.”
  — Matt Grossman (06:29)
• "We've created a whole in-house social media team because we realized that's where consumers are...”
  — Heather Haddon (11:11)

Important Timestamps

| Segment | Timestamp | |-----------------------------------------------|------------| | Setting the scene: Young consumer pullback | 00:34 | | Companies blame young adults for slow sales | 03:09 | | Labor market challenges for young workers | 03:51 | | Earnings impact at fast-casual chains | 04:42 | | Discretionary spending slump, stock declines | 05:10 | | Cyclical vs. structural debate | 05:59 | | Broader spending trends (travel, retail) | 06:51 | | Economic impact of young consumer spending | 09:02 | | Company responses and marketing strategies | 10:54 |

Tone and Style

The episode is informative, analytical, and peppered with industry lingo as befits a Wall Street Journal show. The mood is probing but practical, with the hosts and guests emphasizing both concrete data and open-ended economic questions. While there is concern over the fast-casual sector, there is also an acknowledgment of shifting norms and the resilience—and adaptiveness—of both consumers and businesses.

For listeners or readers—this episode unpacks the real economic headwinds facing a generation, what it means for dining (and beyond), and how companies are preparing for an uncertain but evolving future.