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Chipotle on track to hit $3.5 billion in digital sales in 2022

Diving Brief:

  • Chipotle’s digital sales are expected to hit $3.5 billion by the end of the year, CEO Brian Niccol said at the company’s meeting on Tuesday. second quarter earnings call. In 2021, digital sales were worth $3.4 billion.
  • In-restaurant sales grew 35.9% while digital sales accounted for 39% of sales in the second quarter, according to channel results.
  • Digital sales represent a lower percentage of sales compared to the prior year quarter, when they accounted for 48.5% of sales, as more and more people return to eat in stores. Delivery services revenue also fell to $20.5 million from $23.2 million quarter-over-quarter.

Overview of the dive:

Although more customers are eating at Chipotle restaurants, consumers have a lower engagement with this channel compared to digital ordering, CFO Jack Hartung said on the call.

The composition of orders is also changing. While overall transactions increased between 3.5% and 4%, bulk orders, which tend to be popular through digital channels, fell by around 4.5%.

As in-restaurant and digital sales grow, Chipotle is looking to speed up order fulfillment, especially for digital customers, Nicholas said. The chain has launched an operational initiative that will focus on retraining crew members on service fundamentals, he said. Because many current employees joined Chipotle in the past two years, many haven’t experienced the front line and what it means to grow in-store sales alongside digital sales, he said. .

“These fundamentals include excellent cuisine prepared and ready to serve, from opening to closing in a food-safe environment; ensure restaurants are appropriately staffed and deployed on both the digital production line and the frontline production line; improve order accuracy and timing for digital business; and increased throughput in the hospitality for in-store activities,” said Niccol.

The company also rolled out a new workforce management tool that “helps put people in the right place at the right time,” which, along with the new training, will help boost productivity, it said. -he declares.

Chipotle’s rewards program also has more than 29 million members, and the channel mines data every day to better understand how to influence behavior and drive return visits, Niccol said. The chain is also working to create more personalization opportunities for customers and is evaluating which restaurant incentives provide the best return on investment, he said.