Chipotle's Rewards Program Tops 40M
Five years since its launch, Chipotle Mexican Grill’s rewards program has topped 40 million members.
“Through our marketing initiatives, we continue to find successful ways to drive enrollments, and we are leveraging our digital team to create a seamless app experience and deliver more relevant journeys for our rewards members. The goal is to drive higher engagement in the program, which results in higher frequency and spend over time,” said Chipotle Mexican Grill CEO Brian Niccol during the Q1 2024 earnings call with analysts on April 24.
Marketing Matters
During the first quarter, throughput reached the highest levels in four years, Niccol said, and marketing efforts zeroed in on Barbacoa and publicizing the return of the LTO Chicken Al Pastor.
“Strong sales trends were fueled by our focus on improving throughput in our restaurants, as well as successful marketing campaigns,” said Niccol.
Q1 2024
- Sales grew 14% to reach $2.7 billion, driven by a 7% comp (stores open more than a year).
- In-store sales grew by 19% over last year
- Throughput reached the highest levels in four years
- Digital sales accounted for 37% of sales.
- Restaurant level margin was 27.5%
- Opened 47 new restaurants, including 43 Chipotlanes, the brand’s digital drive-thrus
- Loyalty program enrollments top 40 million
Inside the four walls, Chipotle continues to “explore technology tools that could drive higher productivity and improve the overall experience for our team members,” including forecasting and deploying labor, recruiting new employees, automating the prep of digital orders, and more, he said.
Cultivating Leadership, Lower Turnover
Niccol said the brand is committed to “developing and retaining diverse talent at every level” and recently held a conference for its 4,500 managers. To reach its long-term target of over 7,000 restaurants in North America, it will need to double the number of field leadership positions. “As we target over 90% internal promotions, the majority of these future leaders will come from the GMs and apprentices at this conference. This was a powerful and motivating message and one that is unique to Chipotle given our scale, growth, and company-owned model. And in connection with our 50 to 1 stock split, we also announced that all of our GMs, as well as crew members who have been with Chipotle over 20 years will receive stock grants once the split is effective.”
Better trained employees are happier and also provide better service. “The restaurants run more smoothly as our teams are properly trained and deployed, which allows them to keep up with demand without stress,"
“This leads to more stability and therefore, more experienced teams that execute better every day. And this can be seen in our latest turnover data, which is at historically low levels. And for our guests, faster throughput results in shorter, faster moving lines and hotter, fresher food, strengthening our value proposition and driving incremental transactions.”
Niccol pointed to one Boston location that was doing mid-20 number of entrees in their peak 15 minutes; now they’re doing 40+ in their peak 15 minutes with days that can reach as high as 80 entrees at peak. “The restaurant has low turnover and outsized transaction growth, which clearly demonstrates they are creating a better overall experience in the restaurant,” he said.
At the managers conference, attendees got a sneak peek of the brand’s new automated digital make line and the food prep robot named Autocado for its ability to cut, core and peel avocados. Both the digital make line and Autocado are on track to go into a pilot test at a restaurant later this year, he added.
Marketing Insights
Niccol gave a shout-out to marketing. Through research, the brand learned that many customers didn’t realize that Barbacoa was braised beef. The entrée was renamed Braised Beef Barbacoa, and new marketing emphasized the origin story – slow cooked, responsibly raised beef that is seasoned with garlic and cumin and is then hand shredded. “It was Chipotle's best-kept secret and is now growing in popularity. The campaign was a success driving incremental transactions and spend, and it was simple for our operations team to execute since it was an existing menu item,” he said. This is a perfect example of how our marketing team continues to make Chipotle more visible, more relevant, and more loved.”
The brand plans to open 285 to 315 new restaurant openings in 2024, with over 80% having a Chipotlane.
Full Q1 2024 earnigns can be viewed here.
