Dive Brief:
- For Q2 2018, Chipotle reported digital sales of about $500 million, and the company said digital is on track to be a “multi-billion dollar opportunity,” according to a transcript of the company’s recent earnings call at Seeking Alpha. Q2 digital sales grew 33% year-over-year and now make up 10.3% of sales, a 20% growth from Q1.
- Chipotle also increased the number of users on its app and website by 65% to 4 million active monthly users. Delivery sales quadrupled for the quarter, and the company is projecting that delivery will be available in 2,000 restaurants by year-end, from 1,700 today.
- The restaurant chain’s total sales increased 8.3% to $1.27 billion, which was driven by comparable sales of 3.3% and the addition of 34 new restaurants that opened during the quarter.
Dive Insight:
Following a tough few years in the wake of several high profile food safety issues, Chipotle's Q2 results offer some good news and reinforce signs that the chain's turnaround efforts are taking hold. Earlier this year, Chipotle named Brian Niccol as its CEO, putting an executive known for helping Taco Bell drive advancements in technology, per a Forbes article. Digital tech was a highlight in Chipotle's Q2 results, as the chain drives online orders and delivery sales. These efforts have helped the company target millennial and Gen Z consumers, who are more tech-savvy and appreciate conveniences. Its strong digital sales growth shows that consumers are responding positively, as a growing number prefer mobile ordering options from their favorite eateries.
Chipotle has also been boosting its marketing strategy, as it has worked to bounce back from. In March, the company tapped former Taco Bell chief brand and marketing officer Chris Brandt as its new CMO. Chipotle announced that it is delving into a consumer research project that will be released this fall, but so far, the company has found that digital access is a major sales driver.
In May, Chipotle added drive-thru lanes at some locations for customers who have ordered via the company’s app or website. The restaurant chain also added second “make-lines” to 500 locations to accommodate digital orders and is targeting about 1,000 restaurants by the end of the year, with full rollout by the end of 2019. In the Q2 conference all, the company said the added “make-lines” have positively impacted staff and customer experience. Chipotle also reported that its digital pickup shelf pilots at certain New York City locations have shown “great promise,” and the company plans to expand the test to more markets over the next month.
