Friday, May 6, 2016

If giving away burritos doesn't bring back their loyal users what will Chipotle do?

Last week Chipotle released their quarterly earnings report and it showed a decrease in revenue of 23.4%.(2016)

After a series of disease outbreaks last summer and fall, customers do not appear to be rushing back.  That surprised me as many of the people I had spoken to had already gone back, choosing to believe that it would never happen to them. 

But, it appears that Chipotle's most loyal users are not in such a hurry -- hence the freebies.   

Foursquare Inc. analyzed traffic data from its location-sharing mobile apps (that in and of itself is worth noting) and discovered that heavy users were actually 50% more likely to stay away.  Hmm.  (Jargon, 2016)

Since they were the most frequent visitors they could be concerned that they would be more likely to get sick.  Or is it a trust issue - they never did identify the actual source of the outbreaks.  And closing the stores for a day to tell employees that they should wash their hands wasn't exactly reassuring.  But, it also appears that some of the changes that have been made to increase safety have negatively impacted taste. 

Why do I think that might be the real issue?

So now the stores have gone back to slicing and dicing their own produce.  And there was another store closing for two days in March.   
Coincidence?  Or maybe fresh foods are simply incompatible with the fast food model.

(2016, April 26)  Chipotle Mexican Grill, Inc. Announces First Quarter 2016 Results Chipotle Investor Relations.  Retrieved May, 6, 2016, from

Jargon, J. (2016, April 25)  Chipotle Banks on Freebies.  The Wall Street Journal.  pB2

Whitehouse, K. (2016, March 9)  Chipotle store closed for second day on norovirus fears.  Retrieved May 6, from

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