The fast-food industry is trying to appeal to Gen Z diners. Is the food deal helping?
As fast food becomes more expensive, young adults are reducing their spending, forcing restaurant chains to compete for their dollars through meal deals and promotions.
“It’s really the price that has put me off, and the fact that it has become more of an inconvenience than it was before,” said Fatima Abdul Razzaq, a second-year electrical engineering student at Toronto Metropolitan University.
“If you want to get a proper meal, you’re spending at least $15. And that’s not sustainable,” said Marwan Al Kharat, a second-year computer engineering student at TMU. “It’s too expensive. Can’t afford it.”
Three-quarters of Canadians surveyed said they are eating out less frequently due to the rising cost of living, with that figure rising to 81 per cent of those aged 18 to 34. That’s according to an Angus Reid survey conducted by Restaurants Canada in June.
This has become troublesome for big chains trying to lock in the next generation of their core consumer base – and some are already seeing the impact on sales.
While Chipotle once claimed more than half Most of its customers were young, the Mexican fast-casual brand is now Gen Z is having a hard time getting people out the door.
“What we have seen is a slowdown in the 25 to 34 year old category are under the most financial pressure,” Stephanie Perdue, vice president of brand marketing at Chipotle in Newport Beach, Calif., said in an interview with CBC News.
Chipotle, McDonald’s expect lower sales
During Chipotle’s third-quarter earnings call last month, its chief executive, Scott Boatwright, suggested that — at least in the U.S. — a recession. can be held responsible High unemployment rates, slow wage growth and high debt.
The company reduced its sales estimates third time this year, with the expectation that its customers (especially those making less than $100,000 US per year) will continue to move back from dining out by early 2026.
Chipotle isn’t the only chain seeing a decline from a major portion of its consumer base. McDonald’s CEO Chris Kempczinski recently told investors The brand is also expecting fewer sales from low-income diners next year.
Restaurant industry analyst Robert Carter said fast food customers may be paying attention to pricier burgers and fries for a few reasons. and managing partner at The Strattonhunter Group in Toronto.
“We’re seeing higher labor costs, higher food costs, and so the average check for diners when you go out is higher than in previous years,” he said.
For example, the price of ground beef has skyrocketed – according to Statistics Canada, the price of a kilogram exceeded $15 in August, compared to around $9 five years ago.
Fast-food sales can act as a kind of economic bellwether, indicating the consumer’s ability to spend money on purchases that exceed what is necessary. Even the Bank of Canada warned This is the freshest The monetary policy report said fast-food prices are seeing strong growth.
“The whole tariff conversation and the economic turmoil associated with it is making people feel concerned about their spending,” Cart said.he said, referring to the ongoing trade war in America. “TheYou’ll often say the first cut is to go out of the house to a restaurant.”
Are meal deals the answer?
While Chipotle’s Perdue said the company is sticking to its rewards program to lure back stray customers, other brands are aggressively competing for cost-conscious customers by running special promotions — and for some, it’s working.
Taco Bell, owned by Yum Brands, is trying to target Gen Z with trendy drinks and sauces. Restaurant Brands International, which owns Tim Hortons and Burger King, said both brands had a stronger than expected third quarter.
While Timmy’s – being a mostly Canadian-based chain – was less exposed to US-related economic pressures, Burger King maintained steady traffic. an aggressive push In dining deals – especially its “two for $5” and “three for $7” specials.
“We know that young people, they’re looking for value food, they’re looking for deals, they’re looking for discounts where they can get them. So this is a strategy that a lot of restaurants are using to stay competitive,” said Milena Stanoeva, senior director of communications and public affairs at Restaurants Canada, a trade group for the food service industry.
When they dine out, young people aged 18 to 28 generally give more importance to promotions when choosing a restaurant than older consumers, according to a June 2025 survey by Angus Reid.
Another competitor: grocery stores
Meanwhile, Chipotle said this biggest competitor There is a grocery store for young adults.
“We’re not losing them to competition. We’re losing them to grocery and home meals,” said Boatwright, its CEO, on the company’s recent earnings call.
Stanoeva said there’s also a trend among this same group to replace a full meal with a snack — think of the “girl dinner” trend that swept through tiktok About a year and a half ago — which “may speak to cost concerns or perhaps just how fast-paced their lives are.”
Students who spoke to CBC News said that because prices are so high, they are preparing more food at home and bringing it to school and work rather than ordering in or taking out (although some research suggests this is the younger group). is still one of the most likely To use food delivery apps).
“I don’t want to spend so much money on food. So sometimes I make something at home and eat here,” said Jain Matadar, who was walking around the Toronto Metropolitan University campus with lunch in hand.
Third-year student Nathan Liu said that eating out has become a “significant challenge”, so he has taken up a new hobby: “I try to cook more now. I’m a very bad chef, but I still try.”
Currently, fast-food chains are struggling to get this particular group back into their restaurants.
“The battle to get their share of spend over the next few years is really going to be around this Gen Z and this (Gen) Alpha consumer,” said restaurant industry analyst Carter.
