Chipotle's Winning Strategy for the Holidays? Ignoring Them
NEW YORK -- Unlike most fast-food chains, Chipotle Mexican Grill (CMG) isn't into the holidays.
There are no new menu items, no special promotions and no store decorations. Your experience in the restaurant is pretty much the same in December as it is in July.
So far, that "bah humbug" strategy has worked out well for the burrito and salad bowl company.
Chipotle's fourth-quarter same-store sales have increased an average of 8.1 percent going back to 2011, according to Bloomberg data. By comparison, chains that go all out for the holidays -- Starbucks (SBUX) Americas, McDonald's (MCD) and Dunkin' Donuts (DNKN) -- have seen smaller gains during the same period.
%VIRTUAL-pullquote-Gimmicks like that are the rule in the fast-food universe, but have never been part of our strategy.%"Gimmicks like that are the rule in the fast-food universe, but have never been part of our strategy," a Chipotle spokesman said via email. "Our business is decidedly more focused, with our greatest attention directed to the things that really drive our business -- our unique food and people cultures."
He concluded: "We have never made use of gimmicks like that to drive our business."
Meanwhile, Starbucks stores across the country have been transformed into their usual winter wonderland of red holiday cups and seasonal photos emblazoned on plastic gift cards. Dunkin' Donuts has brought holiday cheer to its bagged coffee this year with flavors like pumpkin spice, apple pie and eggnoggin.
Even McDonald's has introduced a seasonally inspired McCafe beverage called white chocolate mocha.
Instead, Chipotle is highlighting its new catering service on its Web site for holiday work lunches or dinner. Chipotle's catering service contributed about one percentage point to its average check increase of 8.5 percent in the third-quarter. "We will be doing holiday promotions for it [catering]," Chipotle co-CEO Monty Moran said on the company's third-quarter earnings conference call in October.
At the time of publication, the author held no positions in any of the stocks mentioned, although positions may change at any time.
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