Chipotle says it's lost steam with Gen Z and millennial customers due to unemployment, student loans, and stagnant wages

Core Insights - Chipotle is facing challenges with its core customer base, particularly among Gen Z and millennials, who are reducing their spending due to economic pressures [1][2] - The company reported a 7.5% increase in revenue to $3.0 billion for the third quarter, but same-store sales remained flat, indicating potential issues with customer retention [3][7] - Chipotle's stock price has seen a significant decline, dropping about 16% in after-hours trading and approximately 33% over the past year [3] Customer Demographics - Customers earning less than $100,000, which represent 40% of Chipotle's sales, are pulling back on spending [1] - The 25- to 35-year-old age group, which includes older Gen Zers and younger millennials, accounts for about 25% of total sales and is particularly affected by economic challenges [1][2] Economic Factors - The younger demographic is facing multiple economic headwinds, including unemployment, increased student loan repayments, and slower real wage growth [2] - Instead of shifting to competitors, this group is opting for grocery shopping and preparing food at home, leading to less frequent visits to Chipotle [2] Financial Performance - Chipotle's third-quarter results showed a revenue increase, but flat same-store sales suggest a struggle to attract repeat customers [3][7] - The company reported a 4% decline in same-store sales in July, marking one of its worst quarters since 2020 [7] Strategic Initiatives - To attract new and returning customers, Chipotle has launched a loyalty program aimed at college students and introduced limited-time menu offerings [8] - The company is also planning international expansion, with new restaurants set to open in Singapore, South Korea, and Mexico in the coming years [9]