As stores reopen across the US, Chipotle Mexican Grill’s digital sales continue their stronghold.
In a Q1 earnings call with analysts, Brian Niccol, Chairman and CEO, said but 20 of its 2803 restaurants are open, with 92% of them offering in-restaurant dining with capacity limitations.
But its digital platform that demands attention. Niccol credited the brand’s investments in new digital features and innovations for its impressive performance – Q121 was up 134% year-over-year to $870 million, and digital represents 50.1% sales. March set a new record for Chipotle’s digital transactions supported by its best-ever digital order ahead month, over 800,000 app downloads and the most new digital customer since May 2020. A full earnings release is available here.
Chipotle's Q1 21 Highlights
- Revenue increased 23.4% to $1.7 billion
- Comparable restaurant sales increased 17.2%
- Digital sales grew 133.9% and accounted for 50.1% of sales
- Restaurant level operating margin was 22.3%
- 26 of the 40 new restaurants include Chipotlanes
- Loyalty program membership topped 21 million
- Launched a digital exclusive menu item -- quesadila
Its “highest margin transaction digital pickup orders” were more than half of digital sales during Q1, he explained. Within the delivery channel, about 40% were initiated through the Chipotle app or website.
“Our digital sales are a sticky, frictionless and convenient experience as evidenced by our April digital sales mix holding around 50%,” Niccol said.
“Aided by the quesadilla launch, our digital sales are now slightly above the COVID peak from last year. While we've recovered roughly 60% of in-restaurant sales where dining rooms have reopened, we also continued to see outsides digital performance in Chipotlanes, which have revolutionized the drive-thru experience towards order ahead for pickup transactions, which is our most profitable channel.”
Niccol praised marketing for a “great job being agile and remaining relevant to a consumer mindset that continues to evolve.”
Not to be overlooked is Chipotle’s loyalty program that now has 21 million members. “We are leveraging the CRM platform for purpose-driven messaging,” Niccol added.
Roadmap to Future Innovation
“As our digital ecosystem has evolved from a commerce system to a platform of engagement, we continue to look for ways to enhance convenience and access including Chipotlanes, alternative store formats, digital-only menu offerings and Chipotle rewards,” said Niccol. “We are regularly making enhancements to our app, website, delivering group offerings to support the current and expected future growth within this channel.”
Chipotle's investment in Nuro, the autonomous vehicle, is one example. “We believe this has the potential to take the delivery experience to the next level,” said Niccol.