As fast food becomes more expensive, young people are cutting back on their spending, forcing restaurant chains to compete for their dollars through specials and promotions.
“What really stopped me was the price and the fact that it was more of an inconvenience than before,” said Fatima Abdul Razzaq, a second-year electrical engineering student at Metropolitan University of Toronto.
“You spend at least $15 if you want to eat properly. And that's just not sustainable,” said Marwan Al Kharrat, a second-year computer engineering student at TMU. “It's too expensive. I 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 increasing to 81 per cent among people aged 18 to 34. according to a survey by Angus Reid conducted on behalf of Restaurants Canada in June.
This poses challenges for large chains trying to secure the next generation of their core consumer base, and some are already seeing the impact on sales.
Although Chipotle once boasted about it more than half among its customers were young people, now a Mexican fast-casual brand they have a harder time getting Gen Z through the door.
“We noticed a decline in categories among young people aged 25 to 34 who are under the most financial pressure,” Stephanie Perdue, vice president of brand marketing at Chipotle in Newport Beach, California, told CBC News.
Chipotle and McDonald's expect sales to decline
During Chipotle's third-quarter earnings call last month, its CEO Scott Boatwright suggested that – at least in the US – a slowdown can be attributed to higher unemployment, slower wage growth and higher debt.
The company lowered its sales forecast for the third time this year, with the expectation that its customers (especially those earning less than $100,000 annually) will continue to avoid dining out until early 2026.
Chipotle isn't the only chain to see the exodus of a key portion of its consumer base. McDonald's CEO Chris Kempczinski recently told investors that the brand also expects fewer sales among low-income visitors next year.
According to Robert Carter, a restaurant industry analyst, fast food customers may notice more expensive burgers and fries for several reasons. and managing partner of The StratonHunter Group in Toronto.
“We're seeing higher labor costs, higher food costs, and therefore the average food bill when you go out is higher than in past years,” he said.
The price of ground beef has skyrocketed, with the price per kilogram topping $15 in August, up from five years earlier when it was closer to $9, according to Statistics Canada.
Fast food sales can act as a kind of economic indicator, reflecting a consumer's ability to spend money on purchases beyond essentials. Even the Bank of Canada warned his most recent According to the monetary policy report, fast food prices are showing strong growth.
“The whole debate about tariffs and the resulting economic turmoil has people worried about their expenses,” Carte said.Er said, referring to the ongoing trade war in the United States. “You often say the first cut is going to a restaurant out of home.”
Are food offerings the answer?
While Chipotle's Perdue said the company is sticking to its rewards program to lure wayward customers back, other brands are competing for budget-conscious customers by aggressively promoting specials – and for some, it's working.
Taco Bell, owned by Yum Brands, is trying to attract Generation Z with trendy drinks and sauces. Restaurant Brands International, which owns Tim Hortons and Burger King, said both brands have stronger than expected third quarter.
While Timmy's, based primarily in Canada, was less exposed to U.S.-related economic pressures, Burger King maintained steady traffic thanks to aggressive push in food deals—especially the two-for-$5 and three-for-$7 specials.
“We know that young people are looking for affordable food, great deals, discounts, where they can get it. So that's one of the strategies that a lot of restaurants are using to stay competitive,” said Milena Stanoeva, senior director of communications and public relations at Restaurants Canada, a trade group for the food service industry.
When young people aged 18 to 28 do dine out, they tend to place more weight on promotions when choosing a restaurant than older consumers, according to a June 2025 Angus Reid survey.
Another competitor: grocery store
Meanwhile, Chipotle said that biggest competitor for young people – a grocery store.
“We're not losing them to competition. We're losing them to groceries and eating at home,” Boatwright, the company's CEO, said during the company's recent earnings call.
Stanoeva said that same cohort also tends to replace full meals with snacks—think of the “girls' dinner” trend that browsed tiktok about a year and a half ago, which “could indicate problems with prices or perhaps how fast their lives are moving.”
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 food home or getting it to go (though some research suggests this younger cohort still among the most likely use food delivery apps).
“I shouldn't spend so much money on food. So sometimes I cook something at home and eat it here,” said Zane Matadar, who was walking around the Toronto Metropolitan University campus with lunch in hand.
Third-year student Nathan Liu said eating out became a “big challenge” so he took up a new hobby: “I'm trying to cook more now. I’m a very bad cook, but I still try.”
For now, fast food chains are fighting to get this particular group back into their restaurants.
“The struggle will really be around Generation Z and this [Gen] “The alpha consumer will get their share of the spending over the next few years,” said restaurant industry analyst Carter.
