Secondly, it’s working to find existing stores that could use a relocation where the brand can tack a Chipotlane on. One, it’s identifying existing locations that can support a Chipotlane and create that access point. Zalotrawala says Chipotle is taking a “really keen look” at its real estate portfolio as all these dynamics unfold. Essentially, restaurants not in major metros. Niccol said North America offers “hundreds of these” Chipotle can find and build in, including even smaller areas near or off expressways. ![]() Given lower lease costs, as well as a higher success rate in staffing, the fact there’s no trade-off in volume has opened up the map for Chipotle. These lend themselves to Chipotlanes, too, and the ability to deliver unit economics at or better than traditional stores, Niccol said. ![]() Lastly, the brand has found success opening in “small” markets of about 40,000 or so people. Chipotle’s full-year 2021 digital sales of $3.4 billion was nearly three-and-half times what it was pre-COVID. Digital sales represented 41.6 percent of the business last quarter, which amounts to $811 million, of which 20 percent owes to delivery. “I think we’re going to continue innovating around these formats with the idea of, or the goal really, of extending access and convenience,” Zalotrawala says.Īnd they’re also a direct answer to Chipotle’s changing guest. In Q4, AUVs were up to $2.641 million from $2.223 million two years ago. Chipotlanes unlock the company’s aim to eventually sail $3 million average-unit volumes. They produce higher volume than traditional stores-sales as much as 15 percent above-skew toward digital (namely higher-margin takeout versus delivery), and generate cash-on-cash returns in the 65–70 percent range within a couple of years. Chipotlanes are a big ticket on that path. In February, CEO Brian Niccol told investors the brand now believes it can operate at least 7,000 stores across North America, up from prior projections of 6,000. This has been a constant line for Chipotle as it readies for growth. But I think if it’s done well, if it’s planned properly, it only creates more convenience for your constituents. “You don’t want this to become a traffic nuisance within the shopping center, or spill out onto the road. “And sometimes cities have a great point,” Zalotrawala adds. “Versus the 30-car stack that I’m sure you’ve seen at other peers,” she says. Chipotlanes boast a stack of about three to four cars. Today, the brand clocks transactions through the point at “no more than 30 seconds.” The difference, naturally, being customers paid online and are there only to collect. Yet most importantly, Zalotrawala says, Chipotlanes don’t jam traffic. There isn’t excessive signage-enter, exit, drive-thru ahead cues-either. “Ours is a very clean operation where you’re not going to have any kind of noise pollution that comes with those loud speakerphones at the menuboard.” “We have none of that,” Zalotrawala says. Unlike traditional drive-thrus, Chipotlanes don’t include clearance bars, menuboards, or multiple windows as you might see (one to order, another to pick up). And why, in turn, markets should rethink how they view Chipotle either building one or converting existing stores to include it. In recent months, Zalotrawala says it’s been “hard work” explaining to cities, municipalities, and developers why the format should be characterized differently than the classic fast-food staple. How Chipotle is Addressing the Industry’s Turnover CrisisĬhipotle is Headed to a Small Town Near You “It is a pickup lane.”Ĭhipotle’s Focus Turns to Career Advancement for Workers Chains from Noodles & Company to Sweetgreen followed suit, and the field keeps crowding.īut whatever you do at this stage, don’t call the Chipotlane a “drive-thru,” Tabassum Zalotrawala, Chipotle’s chief development officer says. Without debate, however, it’s hardly the only standing. The chain claims it was the first national restaurant to launch such a model, where customers tap orders on mobile or digital devices (no menuboard) and drive up to the access point. And now, there are north of 350 systemwide-a number that’s ready to balloon in 2022, as more than 80 percent of Chipotle’s projected 235–250 openings are expected to feature one. Viewed as a precursor to what might become a full-on drive-thru, Chipotle changed course when early pilots showed customers could roll through in as little as 12 seconds. ![]() Of the brand’s 174 openings last year, 81 percent included a “Chipotlane.” The chain began testing the earlier generation in late 2018. Chipotle’s digital order-ahead pickup windows are far from a case study at this point.
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