Despite attempts by some chains to lure Chipotle customers with discounts on Mexican food, a recent study found that Chipotle fans flocked to burger and pizza concepts in the wake of the chain’s food safety crises rather than competing Mexican spots.
The analysis, conducted by market researcher ITG, looked at anonymous payment card data during the third and fourth quarters of 2015 to see whether cities more directly affected by the chain's E.coli outbreak—such as Portland, Ore., and Seattle—had a stronger dropoff in Chipotle sales.
Consumer spending at the chain dipped the most in Portland, falling 43 percent from the previous quarter, followed by Seattle, which saw a 34 percent falloff.
Cities farther afield, such as Dallas and Miami, saw more muted effects on its business, said Gary Cohen, ITG’s director of market research.
Though Chipotle began to recover as press coverage of the E.coli outbreak waned, sales slipped again about a week after news of the Boston norovirus incident broke—a “cruel one-two punch” that led the chain’s customers to “take their feet off the gas,” Cohen said.
McDonald’s was the biggest beneficiary of Chipotle’s struggles, the study found, as the burger chain snagged at least 10 percent of Chipotle’s market share in the Portland and Seattle areas.
Domino’s, Papa Murphy’s and Panera Bread were also top share-grabbers in several markets, and in Dallas-Fort Worth, Chick-fil-A took the largest bite out of the burrito chain’s business.
Though Taco Bell saw a traffic uptick in Portland, as did Qdoba in Seattle, Mexican restaurants’ gains during this time were “relatively weak,” the study noted.
This may be due in part to Chipotle’s nationwide reach and fresh, made-to-order positioning, the combination of which is not offered by many Mexican chains, with the exception of Qdoba, Cohen said.
While most ex-Chipotle customers switched to other fast-casual or quick-service spots, a “significant number” also visited independent concepts or chose to dine at home, ITG research showed.
Chipotle said its Q4 comps fell 14.6 percent year over year in the wake of its food safety issues, while income dipped 44 percent.