10/26/2023

Weight-loss Drug Worries Plague Restaurateurs

Reduced traffic is already impacting many operations

Investors will look for signs that U.S. fast-food chains, already contending with inflation-stung consumers preferring to dine at home, will also have to grapple with the explosive popularity of weight-loss drugs.

Chipotle Mexican Grill will kick off the earnings season on Thursday and its commentary will be scrutinized by investors worried that appetite-suppressing drugs, such as Ozempic and Wegovy, will spark a fundamental change in food consumption patterns and hurt demand for burgers and fried chicken.

"It's very topical," said BTIG analyst Peter Saleh. "It's kind of the top of the list right now in terms of concerns... investors will likely want to hear more from these companies... on the impact."

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