DENVER – Digital is the key that will unlock growth at Chipotle Mexican Grill Inc., said Brian R. Niccol, CEO. The burrito chain, which has a consumer base that is mostly millennial and Generation Z, has added pickup shelves for digital orders in nearly 350 restaurants and is testing drive-up windows for digital orders at several restaurants.
“I don't think new menu news is the primary unlock,” Niccol said during an Oct. 25 earnings call. “I think it plays a role, but I think the digital access, removing friction and getting into digital access is a big unlock for the Chipotle business. Throughput, reclaiming our throughput capability, is another big unlock.”
Chipotle has added a second make-line dedicated to digital orders in nearly 750 restaurants and is on track to roll out the feature to all restaurants by the end of next year, Niccol said.
“We continued to build momentum in digital this quarter, with digital sales growing 48 percent, accelerating from the year-over-year growth rate we saw in the first half of this year and now accounting for 11.2 percent of sales,” he said. “App downloads have increased 25 percent since last quarter, and we are seeing strong interest from new and infrequent customers, as well as frequent customers.”
Higher menu prices offset lower traffic. Despite improving trends, comparable sales and revenue fell slightly short of analysts’ expectations.