America's Most Popular Fast-Casual Chain Could Double Its Locations, CEO Says
Chipotle is on a meteoric rise, and according to CEO Brian Niccol, not afraid of the competition. While expressing cautious concern about the impact of the latest COVID-19 variant Omicron on the chain's operations, Niccol was optimistic about Chipotle's ability to continue its dominance of the fast-casual market in a recent interview with CNN.
The chain raised menu prices by 4% this year in order to offset the higher costs of labor and commodities like beef, which proved to be a winning strategy—Chipotle's earnings beat expectations and were up by more than 20% in the third quarter compared to the same time period last year.
So what keeps customers coming back in droves, even at higher prices? Niccol says it all comes down to the quality of the food and the great bang for your buck the chain provides.
"We've got really strong value proposition, which gives us pricing power," he said. "Still to this day, a chicken burrito, totally customized the way you want it, is well below $9 in most parts of the country, and it's definitely below $10 everywhere, so we feel like we still provide tremendous quality of food, food with integrity, customized exactly how you want."
From being one of the first national chains to double down on drive-thru capacity, to achieving a rapid rise in digital sales (which more than tripled a year ago), Chipotle is now lauded as a blueprint for success among quick-service chains. But staying ahead of the competition will likely require aggressive growth.
"The good news for us is that we have roughly around 3,000 restaurants, we think we can double that to 6,000," Niccol said. "There's nobody that has got our purpose and our scale."
While this plan is likely a long-term goal for Chipotle, the chain has grown its footprint in the latest quarter as well, despite the inflation on construction materials and shortages of labor and equipment. The chain opened 41 new restaurants during the time period, and only one location did not feature a Chipotlane.
For more, check out:
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