The growing use of popular weight loss drugs may negatively impact the sales of many restaurant brands, according to UBS analysts.
Citing a survey conducted by a bank earlier this year, analysts, including Dennis Geiger, noted that consumers are more likely to reduce their daily calorie intake when taking so-called GLP-1 agonists – a class of drugs aimed at weight loss by suppressing appetite and creating a feeling of fullness more quickly during meals.
"We believe that the growing use of GLP-1 drugs may pose a hurdle for sales of many restaurant brands, including those considered less healthy or with a higher share of sales, while the impact on consumer eating behavior may force restaurants to adjust their menus in line with demand for healthier food," the analysts wrote.
According to the survey of 500 respondents, 40% of them have already changed their eating habits while taking GLP-1 drugs.
At the same time, nearly half have reduced their calorie intake, with about 40% of these respondents cutting 251-500 calories and around 25% excluding 501-800 calories.
More than 50% also reported eating smaller portions, and some even completely skipped meals, UBS reported. Of these meals, 30% said they skip breakfast, 20% lunch, and 10% dinner, they added.
Importantly for the restaurant industry, more than two-thirds stated that they eat less fast food, which analysts believe indicates a "notable hurdle" for fast-food establishments if GLP-1 usage continues to grow.
In addition to fast food, categories such as ice cream and chocolate also showed a more significant decrease in consumption, which may indicate "pressure on dessert offerings," the analysts added.
Although GLP-1s were originally created for diabetes treatment, commercial versions of these drugs – such as Wegovy, Mounjaro, and Zepbound – have become extremely popular as obesity treatments and are closely tied to the success of the pharmaceutical giants developing them, namely Denmark's Novo Nordisk and American competitor Eli Lilly.
In addition to weight loss, these drugs have also shown promise in addressing a range of other conditions, from sleep apnea and arthritis to heart and kidney diseases.
