Chipotle’s digital growth slows, online sales are high

0

Mexican Grill ChipotleDigital sales continue to skyrocket, even as the first wave of newly vaccinated consumers begin to return for restaurant meals. The company ad As of Wednesday April 21, digital sales were up 134% year-over-year for the quarter ending March 31, 2021.

Despite this astronomical growth, the channel is actually developing much slower than at the height of the pandemic, with digital adoption gradually slowing down. In the 2020s second quarter (ending June 30), the company saw a 216% growth in digital sales, with quarantined consumers turning to digital channels at unprecedented rates; in the third quarter (ending September 30), that number declined slightly to 203 percent year-over-year growth; speak fourth trimester, growth had fallen below 200, to 177 percent. Even with this slowdown, the company more than doubled its digital sales in the last quarter.

“Momentum continued to build during the quarter, with March setting a new record for digital transactions, supported by our best digital order month yet – over 800,000 app downloads and highest number of new digital clients since May 2020 ”, Officer Brian Niccol said on a call with analysts. “… Our digital sales are now slightly above last year’s COVID peak… We also continue to see outsized digital performance in Chipotlanes, which have revolutionized the drive-thru-to-ordering experience for pickup transactions, which is our most profitable channel. “

During the quarter, the company announced several changes that could affect its digital channels, for better or for worse. It has piloted its new car-side pickup program in California, announced a price hike for delivery on third-party aggregators, and invested in stand-alone delivery company Nuro.

The company also encouraged consumers to try its online ordering channels by add quesadillas to the menu, available exclusively through the restaurant’s app and website, which Niccol said on the call was the “first new customizable dish in 17 years” and “the most requested item by customers not listed in our existing menu. ” He noted that this addition is very favorable to margins, “leverag[ing] our digital scale while eliminating operational friction using our digital kitchen. “

Discuss delivery price increases, CFO Jack hartung explained: “We were running [a 13 percent price increase] in most of our restaurants across the country. We had a few that were at different levels so we could see differences. We took the whole country and 4% more so we now charge a plus 17. And the reason we did that was because we were convinced that the resistance we saw was acceptable resistance .. We were very comfortable being able to leave. still 4 percent. “

The company continues to refine its digital application and loyalty program. “I think we’ve gotten a lot smarter with the analytics,” Niccol said. “We’re really trying to figure out how we just go from a business experience to an engagement experience. And so what we’re seeing is that people are buying with Chipotle more often, experimenting with other things on the menu, and obviously there will be other improvements to our rewards program going forward. “

Overall, revenue increased 23% year-over-year to $ 1.7 billion, comparable restaurant sales increased 17%, adjusted diluted earnings per share increased was raised to $ 5.36 and the chain opened 40 new locations and closed 5.

“We can clearly see that people want to be back in our dining rooms. You know, I’ve had the luxury of traveling recently, ”Niccol said on the call. “And you know, [Chief Restaurant Officer] Scott [Boatwright] and I’ve been to many restaurants and it’s great to see the lines in our dining rooms again. And, you know, we’re obviously seeing a nice rebound in these dynamic sales because, you know, there wasn’t one a year ago.

He added that while restaurant meals are making a comeback, online sales remain high “for the occasions where they have built digital behaviors,” noting that restaurant re-openings “don’t cannibalize our digital business” as two channels “Really are two separate opportunities.” As for the post-pandemic future, the company will continue to focus on both digital foodservice and offsite channels, effectively treating them as separate entities – according to Niccol, Chipotle intends to continue to “Manage these two companies. in a kitchen. “

——————————

NEW PYMNTS STUDY: OPEN BANK 2021

About the study: Open banking-based payment offerings have been available in some markets since 2018, but the pandemic has prompted many consumers to try these solutions for the first time – and there is no turning back. In the Open Banking report, PYMNTS examines the rise of open banking as merchants and payment service providers around the world exploit these options to deliver secure and transparent account-to-account payments.



Share.

About Author

Comments are closed.