Sweetgreen just posted a $36.1 million loss for Q3—nearly double last year's loss. Same-store sales dropped 9.5%. They slashed their full-year revenue forecast from $700-715 million down to $682-688 million. Sweetgreen Q3 2024 Earnings Report

Here's what matters: this isn't just Sweetgreen struggling. It's the entire fast-casual model hitting a wall with young consumers.

The 25-35 Crowd Is Tapped Out

Sweetgreen CEO Jonathan Neman said it straight: "pressure on consumer spending for many of our consumers" lasted longer than they expected. William Blair estimates this core demographic—25- to 35-year-olds—cut their Sweetgreen spending by 15%. William Blair Restaurant Analysis, October 2024

I get it. This age group is dealing with:

• Student loan payments back in full force
• Real wages going nowhere or backwards
• Housing costs eating everything else

Chipotle's seeing the same thing. Cava's seeing it too—they're being diplomatic about it ("customers are being more thoughtful around their dining occasions"), but it means the same thing: fewer visits. Cava Q3 2024 Earnings Call

Fast-Casual Lost Its Value Proposition

Here's the uncomfortable truth: fast-casual used to mean "better than fast food, cheaper than sit-down." That middle ground made sense when a Sweetgreen salad was $10-12. Now you're looking at $15-18 for the same bowl, and suddenly grocery stores start looking really good.

Chipotle's Scott Boatwright said it plainly: they're "losing [customers] to grocery and food at home." Chipotle Q3 2024 Earnings Call That's not competition from another restaurant chain. That's people opting out of the category entirely.

The market agrees. Look at the stock carnage in the past month:

• Sweetgreen down 21%
• Chipotle down 26%
• Cava down 27%

Goldman Sachs downgraded Sweetgreen to "Sell," pointing to weak sales even in their historically strong urban markets. Goldman Sachs Equity Research, November 2024

Delivery Apps Make It Worse

Here's another angle nobody's talking about: delivery apps compound the affordability crisis. That $15-18 Sweetgreen bowl becomes $22-25 after DoorDash or Uber Eats fees, service charges, and delivery tips.

Compare that to DoorDash's Q3 earnings—they just posted their first profit as a public company. They joined the S&P 500 earlier this year. The delivery platforms are thriving. But their economics depend on taking a 15-30% cut of every order, plus charging customers delivery fees and service charges.

For Sweetgreen, that creates a brutal dynamic. Customers ordering delivery pay way more than in-store, but Sweetgreen doesn't capture most of that premium—DoorDash does. So Sweetgreen loses margin on delivery orders while customers experience sticker shock from the total price.

Young consumers aren't dumb. They see a $24 salad delivered to their door and think "I could buy groceries for three meals with that money." The math doesn't work anymore, especially when you're dealing with student loans and high rent.

The delivery platforms optimized for profitability. Fast-casual chains haven't figured out how to do that while keeping prices reasonable for customers. That's the mismatch killing traffic.

What Happens Next

I don't see this reversing quickly. Unless wage growth picks up—and I'm not holding my breath—these brands need to rethink pricing. You can't keep raising prices 5-7% annually when your core customer's income is flat.

Some options:

1. Value menus that actually deliver value. Not $14 "value bowls." Real sub-$10 options.
2. Loyalty programs with actual discounts. Free delivery doesn't matter if the food's too expensive.
3. Operational efficiency to cut costs without cutting quality. Automation, better supply chains, whatever it takes.

But here's my bet: we're going to see consolidation. Smaller chains won't survive this. The big players—Chipotle, maybe Sweetgreen if they can stabilize—will weather it. The rest? They're going to get acquired or shut down.

Fast-casual spent a decade training customers to expect fresh, high-quality ingredients at accessible prices. Then they priced themselves into the "occasional treat" category. That's a tough spot when your customers are cutting back on treats.

This isn't a temporary dip. It's a repricing of what young professionals will pay for lunch. The chains that figure that out survive. The ones that don't, won't.