If investors had to pick a word to describe Chipotle Mexican Grill Inc.'s latest turnaround, they would probably prefer "unsurprisingly."
This is not a critique of the ideas unveiled Wednesday night by new CEO Brian Niccol. Rather, it's a sign that Niccol – who recently defected from Taco Bell to run his more upscale rival – is cautiously seeking to tackle problems and confront himself with opportunities that have remained well in view for a long time
. in recovery
After a bad reputation for food safety has seriously damaged Chipotle's reputation, it is still striving to regain comparable sales growth
Source: Bloomberg
Niccol puts the spotlight on digital sales when the restaurant industry is clearly in the early stages of a radical change that will favor businesses that facilitate delivery and mobile ordering. Chipotle is committed to delivering delivery within its application from some 2,000 restaurants by the end of the year.
And he takes non-glamorous but important steps to ensure that an increase in digital controls does not erase the works of his restaurants. Niccol said Chipotle was testing self-service shelves to retrieve digital controls, making it easier for customers to enter and exit quickly. The chain also sets up a technology that allows workers to bademble digital drives faster – a system that does not require them to wrinkle the small print on a ticket when they bademble bowls to burrito.
Nothing revolutionary, but let's hope that every Chipotle restaurant can serve more customers and become more productive. Niccol said on Wednesday that he saw the potential of Chipotle to one day reached $ 10 billion in revenue, more than double the sales of last year. Niccol did not say how quickly he expected Chipotle to become a company that captures $ 10 billion in annual revenue, but that would mean more than doubling sales last year.
Source: Bloomberg
Chipotle also takes the right approach to rethink his menu. Instead of running to the door with a risky gesture like starting a breakfast business, Niccol is trying to come up with innovative products to increase traffic during Chipotle's current opening hours. The company tested items such as a lawyer's tostada, which would refresh its menu without seriously disrupting the in-store badembly lines. And it's a good idea to try to use the offers that Chipotle already has to offer to its customers who just want a quick snack, not a full meal. Niccol says the company was planning a "happy hour" that would include 2 tacos with a drink between 2 pm and 5 pm
Finally, the executives said that they were working to reallocate their marketing dollars so that They spend them more efficiently. Echoing comments that he had made in April, Niccol said Wednesday that Chipotle "has kept silent and lost some of its cultural relevance." Indeed, as I noted earlier, consumer perception has stagnated sometimes. This is a problem that faster marketing could help solve.
Expectations are high for Niccol. Chipotle is among the biggest winners of the S & P 500 index since the beginning of the year, with shares up 58.2% until Wednesday's close. (Stocks fell on Wednesday, likely in response to restructuring charges of $ 115 to $ 135 million announced by the company as it moves its Denver headquarters to Newport Beach, Calif.)
Rocket Ride
] Chipotle's actions were on a tear this year
Source: Bloomberg
Still, it is commendable that Niccol has shown restraint and has not put any forward a bold and breathtaking recovery plan. What Chipotle Needs Most, Is to Do Better in Easy Things
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
To contact the author of this story: Sarah Halzack at [email protected]
To contact the editor responsible for this story: Daniel Niemi [19659025] at [email protected]
