Why Chipotle's Alcohol Sales Are Sluggish

chipotle margarita


Chipotle serves standard and Patron margaritas.

Chipotle has been wildly successful over the past decade.

But alcohol sales at the chain remain sluggish, accounting for just 2% of sales, reports Bret Thorn at Nation's Restaurant News.

In comparison, alcohol makes for 8% of sales at Olive Garden and Red Lobster, and 10% at Longhorn Steakhouse, Darden Restaurants said in a recent report. Advertisement

Chipotle's bottled beers and regular and Patron margaritas are seen as secondary to its burritos and tacos, according to Nation's Restaurant News. Fast-casual workers aren't trained to sell customers alcohol. As a result, adult beverages can be overlooked.

Because workers aren't tipped, they have no incentive to encourage customers to spend more money, Thorn writes. This is in contrast to casual restaurants, where alcohol can pad checks and lead to a bigger tip.

The fact that many restaurant workers are so young meant that the restaurants are "not operationally set up" for better alcohol sales, Thorn writes.

Chipotle Serving


Fast-casual workers aren't tipped and have little incentive to push alcoholic beverages.

Chipotle's expanding take-out business also makes alcohol a tough sell. Take-out orders now account for two-thirds of Chipotle transactions, up from 50% 14 years ago, according to Chipotle Chief Financial Officer Jack Hartung. Because alcohol isn't ordered to-go, there's no incentive to buy. Advertisement

But alcohol sales could still be a big opportunity for Chipotle.

Some fast casual restaurants, such as Slapfish in California, have boosted sales by hiring servers to sell the drinks on commission, Thorn writes.

Melt Shop in New York, has pushed its private label and promotions with successful results. Advertisement