A surprising trend has emerged: Gen Z is spending more on Coach handbags than on fast-casual dining at Chipotle $CMG ( ▲ 1.44% ) and Cava $CAVA ( ▼ 1.53% ) , according to CNBC. Despite well-documented economic headwinds—from challenging job markets to astronomical housing costs—this generation is allocating more of their budget to fashion accessories than to meals out.

Tapestry's Unexpected Winner

The beneficiary? Tapestry Inc. $TPR ( ▼ 1.28% ) , which has soared to new all-time highs, up 58% year-to-date.

But the real story from their recent earnings call goes beyond the numbers: Gen Z customers show higher retention rates than other generations, demolishing the persistent myth that Gen Z lacks brand loyalty.

The Restaurant Struggle is Real

Meanwhile, Chipotle and Cava face headwinds as traffic from 25-34 year-olds declines. The culprits are multifaceted:

• Rising unemployment in this demographic

• Student loan repayment pressures resuming

• Tariffs dampening consumer sentiment

• Government shutdown complications affecting benefits and employment background checks

The Gender Gap Factor

Here's what makes this comparison particularly interesting: Tapestry's customer base skews heavily female, while restaurant chains draw evenly from both genders. With male unemployment rates currently higher than female rates, Tapestry's demographics provide built-in resilience.

This gender dynamic explains much of the performance gap. When half your customer base faces disproportionate economic pressure, the impact is amplified—exactly what we're seeing at Chipotle and Cava.

It's Not Just a Chipotle Problem

The fact that both Chipotle and Cava are struggling tells us something important. If Chipotle were alone in its difficulties, we could point to company-specific issues like portion control complaints. But with Cava facing similar challenges, we're looking at broader market forces at work.

The takeaway: Gen Z's spending patterns reflect strategic choices in a tough economy—prioritizing durable goods and brand investments over discretionary dining. Companies with the right demographic mix are weathering the storm far better than those exposed to the hardest-hit consumer segments.

Disclosure

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I am an independent personal finance writer and blogger. I do not have any formal training or certifications in finance, but I have a deep passion for the subject and have been researching and writing about personal finance topics for several years.

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