More than a year after being thrown into a tailspin by a series of food contaminations, the chain is once again on the climb. Same-store sales for the first quarter of 2017 leapt 17.8%, albeit against easy comparisons (comps dropped nearly 30% in the year-ago quarter).
The drivers have included moves the contrarian brand was pooh-poohing just a short stretch ago, like running TV ads, expanding the menu and shifting some food prep outside of stores. Initially, the efforts had a boomerang effect, worsening service by complicating operations and shifting managers’ attention away from guests, according to founder and now lone CEO Steve Ells. He famously graded about half the system’s stores with a C.
The job of the chain’s managers—what it calls its Restaurateurs—“had become overly complex and laden with a vast array of esoteric concepts and abstract measures that prevented our teams from running their restaurants well and, frankly, didn’t focus on the customer or reward great, sustained performance,” Ells told investors. “We eliminated dozens of needlessly complex measures and tasks, freeing up time for training, hiring, marketing and customer service.”
Job descriptions and bonuses were recast to focus on five functions. Ells won’t share the five, but “we’re already seeing this translate into decreased turnover, better customer service scores, better digital sales support, labor efficiencies and improvements in other key performance metrics.”
Going forward, a key part of the struggle to reclaim traffic will be a push for more off-premise business, which pivots on adopting new technology. A smaller production line is being recast as a dedicated prep area for catering, delivery and orders placed via on-site tablets. Kitchen display systems are being installed for greater efficiency on the “second make line.” A new digital ordering system, based not on an app but on a website, is also in the works.
Meanwhile, the menu continues to be tweaked. A honeyed tortilla chip dessert is ready for rollout, and a second offering is in the works. Chorizo was added as new bait.
Less certain is how much focus Chipotle will give its secondary brands. The company scrapped its ShopHouse Asian Kitchen chain, and many investors contend that its others, Pizzeria Locale and Tasty Made, will at best be put on hold.