Gen Z diners snubbing the high cost of fast food. Can they be lured back?

As fasting solid food gets sir thomas more expensive, loretta young adults ar pulling back on their spending, forcing restaurant chains to compete for their dollars through meal deals and promotions.

“It’s really the price that has stopped me, and just the fact that it has become more of an inconvenience than it used to be,” said Fatima Abdul Razzaq, a second-year electrical engineering student at Toronto Metropolitan University.

“You’re spending $15 at least if you want to get a proper meal. And that’s just not sustainable,” said Marwan Al Kharrat, a second-year computer engineering student at TMU. “It’s too expensive. Can’t afford it."

Three-quarters of Canadians surveyed said they were dining out less frequently thanks to the rising cost of living, with that figure increasing to 81 per cent of people aged 18 to 34, according to an Angus Reid survey conducted on behalf of Restaurants Canada in June.

That spells trouble for big chains trying to lock in the next generation of their core consumer base — and some are already seeing an impact on sales.

While Chipotle once boasted that more than half of its customers were young people, the Mexican fast-casual brand is now having a harder time getting Gen Z through the door.

During Chipotle’s third-quarter earnings call last month, its chief executive, Scott Boatwright, suggested that — at least in the U.S. — the slowdown could be attributed to higher unemployment rates, slower wage growth and more debt.

The company lowered its sales forecast for the third time this year, with the expectation that its customers (particularly those earning less than $100,000 US a year) will keep pulling back on dining out into the beginning of 2026.

Chipotle isn’t the only chain noticing a pullback from a key part of its consumer base. McDonald’s CEO Chris Kempczinski recently told investors that the brand is also expecting fewer sales from low-income diners next year.

Fast food customers might be noticing a pricier burger and fries for a few reasons, said Robert Carter, a restaurant industry analyst and managing partner at The StratonHunter Group in Toronto.

“We are seeing higher labour costs, higher food costs, and therefore the average eater cheque when you go out is higher than it has been in years past,” he said.

The price of ground beef, for example, has skyrocketed — the cost of one kilogram soared past $15 in August, compared with five years earlier, when it was closer to $9, according to Statistics Canada.

Fast-food sales can act as a kind of economic bellwether, reflecting a consumer’s ability to spend money on purchases beyond the necessities. Even the Bank of Canada warned in its most recent Monetary Policy Report that fast-food prices are seeing strong growth.

“The whole tariff conversation and the economic turmoil associated with that is making people feel concerned about their spending," Carter said, referring to the ongoing U.S. Trade war. "They'll often say the first cutback is the out-of-home going to a restaurant."

While Chipotle’s Perdue said the company is sticking with its rewards program to lure wayward customers back, other brands are competing for cost-conscious customers by aggressively promoting specials — and for some, it’s working.

Taco Bell, which is 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 U.S.-related economic pressures, Burger King held onto steady traffic thanks to an aggressive push into meal deals — especially its “two for $5” and “three for $7” specials.

“We know that younger people, they're looking for value meals, they're looking for deals, they're looking for discounts where they can get them. So this is one strategy that a lot of restaurants are using to remain competitive,” said Milena Stanoeva, senior director of communications and public affairs at Restaurants Canada, a trade group for the foodservice industry.

When they do dine out, young people between the ages of 18 and 28 are generally placing more importance on promotions when picking a restaurant than older consumers do, according to the June 2025 survey from Angus Reid.

Chipotle, meanwhile, said its biggest competitor for young adults is the grocery store.

“We’re not losing them to the competition. We’re losing them to grocery and food at home,” Boatwright, its CEO, said on the company's recent earnings call.

Stanoeva said the same cohort also has a tendency to replace full meals with snacks — think of the "girl dinner" trend that swept through TikTok about a year and a half ago — which “could speak to cost concerns or maybe just how fast-paced their lives are."

“I shouldn’t be spending this much money on food. So sometimes I make something at home and eat it here,” said Zain Matadar, who was walking around the Toronto Metropolitan University campus with lunch in hand.

Third-year student Nathan Liu said eating out has become a “significant challenge,” so he’s taken up a new hobby: “I try to cook more now. I'm a very bad chef, but I still try."

For now, fast-food chains are fighting to get this particular group back into their restaurants.

“The fight is really going to be around this Gen Z and this [Gen] Alpha consumer in getting their share of spend over the next couple of years,” restaurant industry analyst Carter said.

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