In this Weekly Wrap, we’re looking at sales declines at popular fast casual spots, marketing to ‘kidults’, Instagram-worthy restaurant bathrooms, and more.
The Restaurant Spending Slowdown Hits Fast Casual
The Headline: “The tough restaurant environment spreads to fast casual”
The Source: Restaurant Business Online
What You Need to Know:
Michael Skipworth, CEO of Wingstop, noted that “we hear concerns about elevated prices, future job prospects and general anxiety about the future” after his chain reported its first same-store sales decline in three years.
Shake Shack executives kept touting its improving overall traffic and sales over the summer, to no avail. Its stock was hammered after it reported a 1.8% same-store sales increase coupled with a 1% traffic decline.
Sweetgreen reported a 7.1% same-store sales decline that is tied with, of all chains, Jack in the Box for the worst performance of the quarter, at least so far, and CEO Jonathan Neman cited the “subdued industry backdrop” as one reason. But it is also cutting staff and ditching Ripple Fries after just a few months, much to the chagrin of my Ripple Fries-loving coworkers. (I, for one, refuse to get fries from a salad chain.)
Incidentally, Restaurant Brands International CEO Patrick Doyle on his company’s earnings call last week noted that two privately-held chicken chains he would not name (cough cough Chick-fil-A and Raising Cane’s cough cough) were feeling same-store sales pressure, too.
One guy who might feel a bit of vindication is Scott Boatwright, the CEO of Chipotle, whose chain opened this round of earnings with a 4% same-store sales decline that forced him to tell analysts that this wasn’t a Chipotle problem. “Believe me,” he said, per Jennings’ report, “we’ve unpacked this thing 10 ways to understand, is this a self-inflicted problem, or is this just more a macro problem?”
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Some of these chains are also comparing against an extraordinary year. That was certainly the case with Wingstop, which in 2024 was reporting same-store sales results that, on a two-year basis, is the strongest we’ve ever seen.
Our Take:
The past few years have been banner years for some of these companies, so we have to take these numbers with a grain of salt. When expansion happens at the rate it was occurring, and then that expansion slows, of course you will see reduced sales compared to previous years of growth.
That being said, it still does bring some concern for the overall market. Consumers are being more thoughtful with their spending, dining out less and more strategically.
Is it the end of the world? No. But it does mean it would be wise to think about the perceived value of your offerings, menu engineering, and cost reevaluation. How and who you market to also take a front-row seat in this shift.
We can expect more uncertainty for the foreseeable future. Normally, we would look to job reports to get a sense of where the economy is going, but even that may go away temporarily should the Department of Labor suspend or alter the report. If that happens, the only indicator we’ll have is when we start seeing monthly and quarterly spending reports.
”Kidult” Marketing
The Headline: “The newest restaurant marketing target: 'Kidults'“
The Source: Restaurant Business Online
What You Need to Know:
In short, a kidult is someone 12 or older who does things one might have ordinarily thought of as the purview of children. It comes out most often in the form of toys or collectibles. A kidult is often thought of as a young adult in the Gen Z or Millennial generations, but they can be any age.
There’s a good reason that restaurants are targeting this group. It works.
McDonald’s in April generated strong sales when it lasered in on this demographic with its Minecraft Movie promotion. Traffic spiked at Burger King in late May after it released its How to Train Your Dragon meal. Kidult marketing also helps chains raise funds for charity and even communicate the availability of new services using collectibles aimed at adults.
The toy business has known about this group for years. And in recent years, adults have become that industry’s biggest customer.
Last year, consumers 18 years or older bought more toys than any other age group, surpassing preschoolers for the first time, according to data from the consulting firm Circana.
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Unsurprisingly, much of the fast-food space has jumped onto the bandwagon. Wendy’s last year introduced its “Krabby Patty Kollab” menu items featuring a Krabby Patty Kollab Burger and a Pineapple Under the Sea Frosty, all in partnership with the Nikelodeon program Spongebob Squarepants. The popular cartoon was celebrating its 25th anniversary. '
Same-store sales increased 10% the month of the promotion. Wendy’s is trying again now with the “Meal of Misfortune,” a 10-piece nuggets, small fries and a “Raven’s Blood” Frosty in custom packaging that says, “There’s nothing happy about this meal.” There are also four “mystery sauces.” It’s all done in conjunction with the Netflix program “Wednesday.”
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It’s not just limited-service restaurants. Outback Steakhouse recently brought back its Jaws-themed cocktail, the Aussie Jawsie cocktail, served with sharks that pour grenadine from their mouths. Kura Sushi, the revolving sushi chain, gives away keychains for every 15 sushi plates, featuring different sushi versions under glass on a small plate. The company recently announced a partnership with the Japanese anime program Demon Slayer for an upcoming, exclusive set of collectibles.
Our Take:
Obviously this concept makes sense for QSRs and fast-casual restaurants. As a kid, I remember my parents making a point to go to Burger King until we had EVERY “Return of the Jedi” glass.
Translating it to casual sit-down is a little trickier and really depends on the type of restaurant or bar you run. As an LTO it can be a lot of fun, and riffs on childhood items or memories can absolutely be a draw. I remember stopping by a high-end cocktail bar a few years ago that had several Star Wars–themed cocktails for “May the Fourth.” Their Old Fashioned even came with a Death Star ice sphere.
And it doesn’t have to be just drinks — a dressed-up peanut butter and jelly sandwich would fit the bill for kidults. PB&J isn’t nearly as common in schools anymore, but for many of us it’s an instant throwback to childhood.
The most obvious place for kidult marketing is in theaters. Alamo Drafthouse has done this really well, marketing both their food and drinks to the demographic. Sure, those guests are already there because of their interest in the film, but plenty of theaters still miss the cross-promotion opportunity.
That being said, while there’s definitely a place for marketing to kidults, it can’t be your only strategy. And when it’s done, it has to be thoughtful and on-brand.
The Relevance of Third Spaces
The Headline: “Is a third-place coffee shop still relevant in 2025?”
The Source: Nation’s Restaurant News
What You Need to Know:
When Brian Niccol took the helm as CEO almost one year ago, Starbucks was struggling through multiple quarters of declining same-store sales under his predecessor, Laxman Narasimhan, who blamed dwindling traffic on consumer price sensitivity and increased competition.
Drive-thru-centric coffee chains like Dutch Bros and 7 Brew have emerged as formidable competitors, particularly in the Midwest. According to Technomic Top 500 data, 7 Brew claimed the title of fastest-growing foodservice chain in the U.S. last year with 163% sales growth — nearly double the second-place chain. By comparison, Starbucks posted a 0.5% sales decline in 2024.
A brand overhaul was clearly necessary, which is why Starbucks lured Niccol away from Chipotle Mexican Grill with $85 million in cash and equity to revitalize the Seattle-based coffee giant. During his first year, Niccol has implemented numerous changes —eliminating charges for plant-based milks, restoring condiment bars, and bringing back names on cups. But perhaps his most significant cultural initiative has been the promise to resurrect the third-place coffee shop.
“We're reclaiming the third place so our cafes feel like the welcoming coffee house our customers remember,” Niccol said in his first earnings call as CEO last October. “We’re beginning to review and revise our cafe designs to bring back more comfortable seating and amenities and to ensure our stores are a place where customers want to sit, work and meet.”
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“The issue is that the American public has moved to be more on the go, and Starbucks was smart to follow that,” John Gordon, an analyst at Pacific Management Consulting Group, said. “They were also following store economics, and a store with a drive-thru essentially doubles the AUVs. … I like companies that are flexible on their store profile, because that's what America is like now. You can't just go out and build the same kind of concept over and over.”
This raises the question: As Starbucks remodels stores with more comfortable seating and cozier lighting, do on-the-go Americans in 2025 need the Starbucks of yesteryear? Or do they want an intuitive mobile ordering experience, fast service, and more affordable coffee prices?
Many trending drive-thru coffee chains have naturally replaced the third-place café with speed and friendly service, even through a car window.
"The 'third place' between home and work is your car,” 7 Brew CMO Nick Chavez said. “It’s not just a place to get where you're going. It's a place to enjoy music, catch up with friends, recharge, grab a bite or a tasty beverage. 7 Brew is built for this modern 'third place.' We make the drive-thru an experience, a jolt of positivity.”
Our Take:
There’s something to be said for grabbing a quick cup of coffee and moving on with your day. Chains like 7 Brew and Dutch Bros are absolutely killing it right now, and they’re not going anywhere — expansion is almost a given. But those brands are exactly what they set out to be: places built for speed. They serve a niche, and it’s a very big one.
That said, third places still matter. At least once a week I need to meet someone for coffee. Where do you think that happens?
More than once a week I’m between home and the office and need to knock something out fast. Am I going to a bar? I’d love to, but most likely I’m heading to a coffee shop.
Yes, for some people, the car has become their third place. But as we’re seeing, Gen Z craves social interaction, and they’re not always looking for it over a cocktail.
That’s why Starbucks’ move makes sense. Habits shift and times change, but gathering places have always been a part of how we live. People want somewhere to go.
Bathroom Beauty
The Headline: “The Best Restaurant Restrooms for a Selfie Break in Atlanta”
The Source: Eater
What You Need to Know:
We go to restaurants for the food and ambiance, but these days, a well-designed bathroom may steal the show. In the Instagram era, bathrooms do more than serve as a pit stop; they’re backdrops for selfie photoshoots. Designers across Atlanta are creating bathrooms decked out with murals, tiled mosaics, and dreamy lighting. Whether it’s a neon sign or flying pigs, here are eight Atlanta restaurant bathrooms that make a mid-meal bathroom break part of the overall experience.
Our Take:
I know, this is a silly article. But there’s something here. With all the expenses of building out a restaurant, why would anyone spend extra time or thought on the bathroom? People are just going to relieve themselves in there anyway. It should be clean, simple, and smell as good as a bathroom can, and that’s it, right?
F*ck that.
Think about it: you spend hundreds of thousands — often millions — of dollars building out a space. The concept is perfectly thought out. The branding is on point. The cocktails and food are stellar. The service and hospitality are dialed in. And then your guests walk into the bathroom and it’s plain as can be.
But what if the bathroom actually fit the rest of the aesthetic? What if it were fun? What if the art in the bathroom was more interesting than the art on the walls? What if people started posting pictures of your bathroom on social media?
Here’s the thing: unless it’s dirty, a bathroom probably won’t ruin a guest’s experience. But when the design and thought extend into the bathroom, it says volumes about the operator. It shows they care and have left no stone unturned, that they’ve considered the guest experience from every angle, down to the very last detail of what a guest touches or sees.