Have you recently given up your salad-bowl lunch habit? You’re not alone.
Many American consumers are feeling the pinch, and it’s affecting how they shop, and where and how often they dine out.
Consumer sentiment is down, job cuts are on the rise, and dining out has become pricier as operators contend with higher labor, ingredient, and rent costs.
People are looking for value — but not necessarily the cheapest option — through loyalty perks, portion sizes, and perceived quality.
Here’s a look at some of the chains that are — and are not — benefiting from this:
What’s in: Casual dining, packed lunches
Millennials tried their best to kill off casual dining chains, but the next generation is helping bring them back.
Chili’s has been leading the way here and outperforming rivals like Applebee’s. The Tex-Mex chain, which also serves American classics like burgers and fries and is owned by Brinker International, reported a 21% surge in sales for the most recent quarter.
Analysts say it was quick to capitalize on rising fast-food prices, offering deals such as its $10.99 Big Smasher burger.
It also simplified its menu and overhauled its marketing to speak to younger diners. Gen Zers seem to be lapping up its content and are making viral videos about its menu items.
At the same time, tighter budgets and hybrid working have also been reshaping midday dining.
Pricier lunch spots, such as Chipotle, said they are losing out as people choose to eat at home more.
“For occasions like lunch, people are substituting things like eating at home, bringing in food from home, or finding cheaper local alternatives,” GlobalData Retail analyst Neil Saunders told Business Insider.
Lower-cost grocery chains may be benefiting from this. Walmart’s imminently departing CEO Doug McMillon said the chain is continuing to gain market share in grocery and grow its higher-income shopper base.
What’s out: $15 salads
The “slop bowl” chains are having a tough time right now.
Execs from Chipotle, Cava, and Sweetgreen all said in recent earnings calls that they’re seeing fewer visits from millennial and Gen Zers.
“The whole salad scene has dissipated,” Phil Kafarakis, CEO of IFMA, The Food Away From Home Association, told Business Insider.
They’ve “tripped up over themselves because their economics and pricing don’t fit the consumer that they were really so close to,” he added.
Sweetgreen’s CFO said in the company’s most recent earnings call that spending from the 25 to 35 age group, 30% of the chain’s consumer base, was down 15% in the recent quarter as this cohort came under pressure.
The challenge now is figuring out how they address their pricing, knowing that their core demographic can’t afford it, Kafarakis said.
Investors appear to be wary as well. Sweetgreen’s stock price is down over 80% this year.
What’s mixed: fast food
“Trading down” has become the buzzword of the retail sector right now, as shoppers switch up their routines to find cheaper alternatives.
McDonald’s CEO Chris Kempczinski suggested in the company’s most recent earnings call that the fast-food sector is seeing an impact from this, as traffic from higher-income diners grows.
It’s a double-edged sword, however, as the industry is also seeing a decline in traffic from lower-income diners, he said.
“We continue to see a bifurcated consumer base,” Kempczinski said.
We “remain cautious about the health of the consumer in the US — and believe the pressures will continue well into 2026,” he added.
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