A few highs (but mostly lows) from Q3 2025
Tl;dr: it’s not a good time to be a fast-casual brand. A fast-casual *robot,* on the other hand…
“Whoa, what happened at DoorDash?” someone completely unrelated to the restaurant industry texted me last week when the company reported its third-quarter earnings.
They were referring to a record 17 percent drop in DoorDash’s stock price last week after the company delivered a quarterly report that mostly beat Wall Street’s expectations.
So what’s the problem? Apparently investors worry the ~$85 billion U.S. market leader is spending too much money. DoorDash also told investors it plans to keep aggressively spending money on improvements, bolstering its position as a top global commerce platform. But in yet another example of the-markets-defy-my-personal-logic, Wall Street did not like this. (I’m no financial analyst, but I do understand that shareholder value and actual value are two different things.)
During the early November call, DoorDash CEO Tony Xu explained the company’s 2026 plans to invest in internal tech that unites U.S.-based DoorDash and its international delivery platform acquisitions, Finland-based Wolt, and UK’s Deliveroo, plus big investments in artificial intelligence to help its engineers. (“If we were starting a company over again today, I think we would write software pretty differently from how we used to do it,” Xu said.)
DoorDash also plans to keep launching new products and services, just as it did in the third quarter, wowing industry watchers like me with a fast integration of SevenRooms’ reservations technology just months after it bought the company and an actual surprise delivery robot that somehow did not leak to the press during development.
“We’re running the business exactly as we always have,” Xu said during the call.
Still, the next day, DoorDash lost some $17 billion in value.
Seeking comfort, stability, and a sure thing
If a thriving tech company’s spending is too risky for Wall Street’s taste, consider the classics.
McDonald’s, considered a bellwether for consumer well-being thanks to its low prices and ubiquitous locations, continued to see less business from lower-income diners. It’s a trend that the CEO said has persisted for almost two years. But higher-income customers are coming to McDonald’s more often. (That news, plus better-than-expected domestic same-store sales, was enough to help McDonald’s stock rise slightly the following morning.)
Good news for McDonald’s when it comes to higher-income diners tends to be bad news for fast-casual chains like Chipotle. And indeed it was bad news for the burrito brand this quarter, which had to cut its sales forecast for the third time this quarter. The stock tanked after earnings; the chain’s CEO said that people are visiting Chipotle a lot less, especially low- to middle-income consumers. Diners between 25 and 35 — an important segment for Chipotle — are facing challenges like unemployment and increased student loan repayment, the CEO said.
It wasn’t exactly well received. “Blaming the consumer is a bad look and accountability is everything,” Bloomberg Intelligence senior restaurant analyst Michael Halen wrote on LinkedIn.
Cava, the fast-casual Mediterranean chain serving bowls of grain, protein, and vegetables to diners — and last year’s restaurant industry darling — didn’t fare well, either.
CEO Brett Schulman told CNN a fast-casual story that’s similar to Chipotle’s: “We know our Gen Z consumers are certainly facing headwinds this year that may not have existed last year,” he said. “When you look at the industry since 2019, while sales have grown, transactions are actually down 7 percent. The industry has gotten too expensive for consumers.”
The fast-casual, bowl-building Sweetgreen didn’t fare well either; its same-store sales dropped 9.5 percent; foot traffic fell over 11 percent.
If it’s bad out there for robots and bad out there for bowl-serving restaurants, what about the bowl-building robots?
Aha, gotcha! Bet you didn’t see this one coming! (Though I’ve asked a version of this question before.)
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Sweetgreen’s bowl-making robot, dubbed the Infinite Kitchen, just earned the restaurant company $186.4 million, including $100 million in cash. The company is selling the “IK,” as it’s called in earnings shorthand, to New York-based Wonder, the $7 billion restaurant-slash-mealtime super-app. The deal will close late this year or early next.
This news feels a little sad. Sweetgreen has always been proud of its automation; it bought the tech a few years ago from fledgling restaurant concept Spyce, in Boston.
“We took what was a nascent idea, really a prototype in a couple of stores. We perfected it for Sweetgreen. We’ve commercialized it. We’ve gotten the manufacturing set up, and we’ve now scaled it,” Sweetgreen CEO Jonathan Neman told investors and analysts on his company’s earnings call last week.
Wonder plans to scale the tech further, reaching over 100 of its own facilities over the next couple of years. Sweetgreen will continue to use the technology; about half of the store’s planned new openings will feature the IK.
Still, as my onetime editor David Lidsky wrote in Fast Company — a publication to which I have contributed a few pieces about Sweetgreen — “it’s time to eulogize Sweetgreen’s star-crossed life as a tech company. No more dreams of AI, blockchain, or robots.”
His prognosis, that I agree with, is that Sweetgreen really needed cash. And Wonder, as it turns out, has become a reliable acquirer of misplaced and/or troubled restaurant technology companies. (See: the $650 million acquisition of Grubhub from a company that paid $7 billion for it just a few years before.) Wonder plans to scale the tech inside its own restaurants; it’ll continue to operate the bots inside current and future Sweetgreen locations, too.
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Big thanks to David Lidsky and Fast Company for shouting out the best headline I’ve ever written for Expedite: Salad doesn’t scale like software. Or hardware, it turns out!
