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This Month’s Featured Content

Why Consumers Are Abandoning Chipotle, Sweetgreen and Cava

Written by Jordan Chussler. Date Posted: 12/10/2025. 

Article Highlights

• As consumer confidence fades, fast-casual restaurants are missing earnings as customers seek out more budget-friendly options.
• Chipotle, Sweetgreen, and Cava have seen their stocks fall by 48%, 82%, and 60%, respectively, over the past year.
• In the company’s Q3 earnings call, Chipotle’s CEO blamed “persistent macroeconomic pressures” but did not address the company’s runaway prices.

With a loss of 0.02% over the past three months, the S&P 500’s consumer discretionary sector has posted the fourth-worst performance among the index’s 11 sectors.

While the expected record amount of holiday spending could keep the sector afloat through year-end, there’s little indication investors should be bullish about this corner of the market as the calendar turns to 2026.

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That’s particularly true of fast-casual restaurants, including Chipotle Mexican Grill (NYSE: CMG), salad chain Sweetgreen (NYSE: SG), and relative newcomer Cava (NYSE: CAVA), which specializes in Mediterranean-inspired cuisine. Over the past year, those stocks have fallen about 48%, 82%, and 60%, respectively.

With the sector pressured by persistent inflation, shifting consumer sentiment, and a softening labor market, there’s little reason to expect a near- or mid-term rebound for CMG, SG, or CAVA.

Fast-Casual Restaurants Lose Traffic as Consumer Confidence Wanes

Despite the market’s slow recovery from April’s tariff-induced correction, the consumer discretionary sector remains weighed down by higher prices and a weakening job market.

That combination has strained household budgets and weakened consumer confidence, which in turn has hit discretionary stocks through reduced sales and missed earnings and revenue targets.

When Chipotle reported Q3 earnings on Oct. 29, it posted EPS of $0.29, matching analyst expectations, and revenue of $3 billion, which missed estimates.

Sweetgreen’s Q3 results on Nov. 7 were also disappointing: EPS of -$0.31 missed forecasts of -$0.18, and revenue fell short of expectations. Cava, on Nov. 4, likewise reported both EPS and revenue misses.

Runaway Menu Prices Push Away Lower-Income Customers

Pricing is a major pain point. Once viewed as affordable alternatives to traditional sit-down restaurants, fast-casual chains are increasingly perceived as expensive, driving customers toward cheaper options.

At Chipotle, for example, a bowl with guacamole and premium meat averages about $13.50. With delivery and fees, a single meal can easily top $20. A spicy lamb and avocado bowl at Cava is $15.85, and Sweetgreen’s Power Max Protein Bowl is $22.45.

Those prices have contributed to consumer price fatigue and pushed lower-income diners to more budget-friendly choices. Chipotle’s Chief Restaurant Officer Scott Boatwright cited “macroeconomic pressures” in the Q3 earnings call, noting that guests with household incomes below $100,000—who account for roughly 40% of Chipotle’s sales—are “dining out less often due to concerns about the economy and inflation.”

Boatwright highlighted customer challenges such as unemployment, increased student loan repayment, and slower real wage growth, but he downplayed price increases as a primary driver of declining traffic.

He added that “value as a price point is not and will not be a Chipotle strategy,” saying the company will instead focus on improving execution, communicating value more effectively, and accelerating menu and digital innovation.

Faltering Financials Suggest More Pain Ahead

Digital initiatives and menu innovation are unlikely to win back customers if pricing remains out of reach. Until fast-casual chains address affordability, their income statements may continue to disappoint.

From 2021 to 2024, Chipotle’s revenue growth slowed from more than 26% year-over-year (YOY) to under 15% YOY.

Over the same period, Sweetgreen’s revenue growth declined from over 54% YOY to below 16% YOY.

Cava, which went public on June 15, 2023, was the only one of the three to show accelerating revenue growth over the past two years, but its operating cash flow growth fell from roughly 1,508% YOY in 2023 to 65.83% YOY in 2024.

This year, all three have faced similar headwinds. In the first three quarters of 2025, Chipotle recorded EPS growth of 7.69%, -3.03%, and 3.57%. Sweetgreen’s EPS growth was 8.70%, -53.85%, and -72.22% across the same periods. After reporting Q1 EPS growth of 83.33%, Cava posted -5.88% in Q2 and -20% in Q3.

Wall Street has taken notice. Chipotle’s short interest stands at 2.31%—relatively modest for a large-cap name—while Sweetgreen and Cava face much higher skepticism, with short interest at 24.14% and 15.62%, respectively.

Unless these companies pivot to address affordability and shifting consumer priorities, investors should expect continued weakness from these fast-casual staples.

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