Are weight-loss drugs a threat to the restaurant industry?

Are weight-loss drugs a threat to the restaurant industry?

The increasing number of people on GLP-1s have worried some investors about the profitability of the restaurant industry. Those on GLP-1s tend to eat less and cut back on alcohol which pulls down spending per head. Desserts and alcohol tend to be higher margin items, which exacerbates the strain.

But restaurants are responding by adjusting menus, portion sizes and explicitly marketing ‘GLP-1 friendly’ menus.

For example, Chipotle has introduced a Double High Protein Burrito and Shake Shack has introduced the ‘Good Fit Menu’ with high protein, low carbohydrate, GLP-1 friendly reworks of existing menus.

McDonald’s has said it is testing higher protein, smaller portion items to adapt to the changing consumer landscape.  

Here in the UK, supermarket Morrisons is launching exclusive GLP-1 friendly meals as well as food-to-go sandwiches and salads pitched as balanced, high protein, moderate calorie options.

The net effect on the economics of restaurants is a shift in margin mix towards premium-priced proteins and add-on charges for specialty sides and functional beverages.

In practice, this often means GLP-1 friendly menus often have equal or higher margin items, even if total calories per head are lower

Oral weight-loss pills enter the market 

The battle for supremacy in the fast-growing market for weight-loss drugs entered a new phase in 2026 after Danish firm Novo Nordisk launched the first FDA (Food and Drug Administration) approved daily oral pill.  

It is the second time that Novo has beaten US rival Eli Lilly to the starting gate, after first launching its injectable treatment Wegovy in 2021, two years ahead of Lilly’s rival treatment Mounjaro.

Despite its first mover advantage, Novo has seen its shares massively underperform Lilly’s, gaining just 37% over the last five years compared with a 400% advance for Lilly shares. 
 

The Danish company issued several profit warnings in 2025 linked to market share loss to copycat makers, called compounders, who sold unbranded versions of Wegovy at a fraction of the price.

The FDA allowed compounders to enter the market while there were shortages of both Wegovy and Eli Lilly’s rival treatment Mounjaro, as the two leading weight-loss firms struggled with supply bottlenecks.

Official shortages ended in April 2025, but over the last two years compounders have grabbed around a third of the market, according to some analysts.

In early 2026 the FDA stepped-up enforcement within the weight loss market, including targeting manufacturers and distributers of mass-marketed compounded GLP-1 products, with the threat of seizure or injunction.

In response, telehealth firms have started shifting their focus towards FDA regulated products which suggests the market share of compounders could shrink over coming months.

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What does this mean for the weight-loss market?

For the first time in a couple of years, millions of Americans looking to lose weight have a choice of a regulated weight-loss treatment for a price which is a lot more affordable.

Analysts estimate that up to 40% of new patients who would have previously chosen compounders are now opting for the branded pill through official channels.

The Wegovy pill has seen rapid adoption since launch on 5 January, reaching 170,000 users in the first month, far outperforming the take-up of the injectable version.

Rival Eli Lilly is expected to receive regulatory approval for its oral obesity drug, orforglipron in the second quarter of 2026.  

Analysts estimate that while 15 million people are open to weekly injections, up to 85 million people are willing to take a daily pill. Research suggests oral GLP-1 pills could capture around a quarter of the obesity market.