BREAKINGVIEWS-The K-shaped economy is claiming corporate victims
Chipotle Mexican Grill has cut its annual sales forecast for the third time this year, citing pressure on consumer spending for dining out, particularly affecting younger Americans. The company anticipates a decline in comparable restaurant sales for 2025, leading to an $8 billion loss in market value and a 17% drop in shares during midday trading in New York. This reflects a broader trend of a K-shaped economy, where wealthier consumers are driving spending while younger demographics struggle.
(The author is a Reuters Breakingviews columnist. The opinions expressed are his own.)
By Pranav Kiran
TORONTO, Oct 30 (Reuters Breakingviews) - Richer, older Americans are carrying US consumer spending as income growth for the young slows. It’s now showing up in the lunch line, with burrito-slinger Chipotle losing $8 bln in value on weaker sales. The once-ubiquitous meal bowl is an early casualty of a growing problem.
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CONTEXT NEWS
Chipotle Mexican Grill on October 29 cut its annual sales forecast for the third time this year, warning that consumer spending on dining out is likely to remain under pressure through early 2026.
The company expects 2025 comparable restaurant sales to decline in the low-single-digit range, compared with prior forecasts that had sales holding roughly flat.
Shares were down 17% in midday trading in New York. (Editing by Jonathan Guilford; Production by Oliver Taslic)
