Coronavirus boosts Chipotle's app and online business, gains the burrito giant believes will last after the pandemic is over
Chipotle's digitalsales grew more than 102% in March, as customers sheltered-in-place, ordering burritos for delivery or pick-up.
- Chipotle anticipates digital growth to continue to pay off after the pandemic ends, with CEO Brian Niccol saying he expects to see dining rooms begin to reopen "in the next month or two."
- "Our rewards database just went from 8 million to 12 million," Niccol said. "And that's going to be a very valuable asset."
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As the restaurant industry faces plunging sales and massive layoffs,
On Tuesday, Chipotle reported that its digital sales grew 80.8% in the most recent quarter, accounting for 26.3% of all sales as dining rooms shuttered and customers sheltered in place.
In March, digital sales grew 102.6% year-over-year, driven by customers staying home and a national partnership with Uber Eats. Digital orders made up more than a third of Chipotle's sales for the month.
CEO Brian Niccol said investments in digital, which accelerated when he became CEO in 2018, helped the company pivot the business to reach $372 million in digital sales. Niccol said he was also excited to see the digital business work alongside its more traditional ordering system, as dining rooms reopen "in the next month or two."
"Our rewards database just went from 8 million to 12 million," Niccol said. "And that's going to be a very valuable asset."
Chipotle's same-store sales grew 3.3% in the quarter, including a decline of 16% in March. The company said it saw the biggest same-stores sales drop the week of March 29, plummeting by 35%, and that sales have since improved in April. Same-store sales were down in the high teens in the most recent week, adjusted for Easter, Chipotle said.
As the coronavirus spread across America, chains have turned to apps and digital order to try and retain customers.
The vast majority of chains are pushing delivery, to-go, and curbside pick-up services, most emphasizing orders through their apps or websites. Just Salad switched to 100% digital orders, while some Chick-fil-A locations are banning cash payments and encouraging customers to order via app.
Belief that digital orders and apps are crucial to the future of the restaurant business is far from a new concept in the industry. Chipotle made significant investments in digital in 2019, with CFO Jack Hartung telling Business Insider last November he believed digital could one day be 30% to 50% of total sales. Now, Chipotle executives are banking on current growth to continue after the pandemic is over.
"I'm very excited to leverage all the digital gains we made," as businesses reopen across the US, Niccol said on Tuesday.
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