Chipotle Mexican Grill is a chain of restaurants specializing in tacos and mission-style burritos. Chipotle can be found in over 2000 locations all over the United States, United Kingdom, Canada, France and one location in Frankfurt, Germany.
2017 started on a very positive note for Chipotle, as they reported a 15% increase in sales. Which is much-vaunted news after some outbreak concerns in the year prior. Today Chipotle is forging ahead with expansion plans in Europe, here’s why.
With help from McDonald’s circa 1998-2006, Chipotle grew from 15 locations to 500. McDonald’s had a 90% stake in the franchise in 2005. Then the franchises parted ways, for reasons not pertinent to this discussion. Despite growing to over 2000 locations in the 11 years, it is still a fraction of McDonald’s nearly 37,000 locations worldwide. Chipotle will want to accelerate their growth by entering new territories, of which Europe is full.
Chipotle is constantly growing in their existing territories, but they have had a hard time breaking into new ground. Germany has only one location and that has been the case for quite some time now.
2. More menu items
Chipotle has understood that they cannot have a limited menu and global expansion so they are expanding their menu to add dessert menu items. Though it can be argued that this maneuver will not bring strong growth, however, it will augment other features that will add to the overall value of the experience. The variety of menu can also lead to more money spent per customer, raising the bottom line. Chipotle has increased the price of their menu items, but they can offset these premiums by guaranteeing quality meals. To overcome this challenge, they come into markets with finer palettes, acceptance in which will reinforce their premium status in their existing territories.
Chipotle has increased the price of their menu items, but they can offset these premiums by guaranteeing quality meals. To overcome this challenge, they come into markets with finer palettes, acceptance in which will reinforce their premium status in their existing territories. 3. Online Tools
3. Online Tools
Chipotle recognizes that in order to compete with fast food chains, it needs to grow in a very different direction. Chipotle will let you check the dietary stats on the food you eat from the restaurant chain and manage your caloric intake. Customers can even assemble customized meals to suit all their dietary needs. This brings a layer of appeal to the health-conscious diners, of which there is a significant amount in the European region.
The web space is not just limited to planning a meal, it also integrates take-out options from their existing menu. Globally, online food orders are at an all-time high. Forbes indicates that this market is expected to grow to $38 Billion dollars by 2020. The same research also suggests that consumers spend more money when ordering online than they would in person or even over the phone, by as much as 15% more. So instead of Googling how to find a Chipotle near you, Chipotle would rather want the customers to get their entire meal online.
Chipotle has suffered through repeated food related outbreaks in the past few years, including E. Coli, Norovirous and Salmonella. To recoup losses from these scares, they are planning on expanding to different markets where the company’s image has not yet been tarnished.
Acceptance in the new markets will reassure existing markets that the food quality and content is no longer of questionable integrity.
5. New Products
Chipotle recognized that their menu items might not have a global appeal, so they added ShopHouse (an Asian themed restaurant) as well as Pizzeria Locale to appeal to a wider audience, especially in European regions. This expansion works well on two fronts, the company brings new products to existing markets and it helps capture new markets in newer locations. It stands to reason that new territories might be more accepting of one item over another.