The fast-food industry is trying to lure in Gen Z diners. Is the meal deal helping?

As fast food gets more expensive, young adults are 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.

“What we’ve noticed is a category slowdown for the 25-to-34-year-olds that are under the most financial pressure,” said Stephanie Perdue, vice-president of brand marketing at Chipotle in Newport Beach, Calif., in an interview with CBC News.

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.