And if it's to be believed on an initial pass, we are either in a mild recession or nearing one.
While I was listening to Chipotle’s earnings call Wednesday night, CEO Scott Boatwright pinned a weak quarter and soft start to the fourth quarter (sales trends worsened versus the third quarter) on the financial troubles of young people.
It makes sense at first glance: AI is ripping through the entry-level job market, and 25-year-olds are still repaying loads of college debt.
"Earlier this year, as consumer sentiment declined sharply, we saw a broad-based pullback in frequency across all income cohorts," Boatwright explained. "Since then, the gap has widened, with low to middle-income guests further reducing frequency. We believe that this guest, with household income below $100,000, represents about 40% of our total sales, and based on our data, is dining out less often due to concerns about the economy and inflation. A particularly challenged cohort is the 25 to 35-year-old age group."
