Chipotle has really ramped up promotional activity this year, in an ongoing effort to improve the brand’s value perception.
And the biggest promotion day for Chipotle?
Halloween.
So it’s not surprising that this year the fast-casual chain is making its spooky season promotion even bigger.
The chain on Monday announced it will be offering “Chip-or-Treat” deals weekly throughout the month of October. Rewards members who purchase an entrée each week will get an email providing another treat—tailored to their preferences—valid for five days. They will also earn a Reward badge, which unlocks other extra perks.
Chip-or-Treat runs through Oct. 30, and it’s only the run up to the big day, Oct. 31, or Halloween. At Chipotle, that means the annual Boorito promotion, which is in its 25th year.
Boorito is usually a big deal for the brand. More is coming on how Chipotle will mark this year’s celebration, but typically it involves the offer of a deeply discounted burrito, bowl or other entrée.
Last year, for example, Rewards members who dressed in costume received a $6 entrée and Chipotle locations near college campuses extended hours until midnight.
Typically, fast-casual brands don’t really play the straight discount game, with knocked-down pricing or bundled meals, said R.J. Hottovy, head of analytical research at industry traffic tracker Placer.ai.
But in today’s increasingly discount-heavy environment, brands like Chipotle are trying to grab the attention of diners who are very value-conscious. Over the past year, an estimated 30% of foodservice traffic was motivated by a deal, according to data firm Circana. That’s the highest rate in 50 years.
For Chipotle, that has resulted in a steady pulse of marketing pushes in recent weeks, including the launch of a new chimichurri sauce and the return of Carne Asada last month.
During the summer, the chain introduced small-group ordering, and a first-ever Rewards program specifically for college students, as well as an opportunity to win $1 million in free Chipotle, and a buy-one, get-one deal for guests who applied temporary tattoos.
There was also the Summer of Extras program for loyalty members to earn free food.
Chipotle CEO Scott Boatwright said in July the brand would roll out “new and creative ways to emphasize our value proposition while improving the benefit of our offering through better execution, menu innovation and amplifying our Rewards program.”
Hottovy said it’s too soon to tell whether the drumbeat of marketing is having an impact on traffic.
But Chipotle’s share of fast-casual-visit traffic has grown in recent years.
In the second quarter this year, Chipotle’s share of fast-casual visits reached 26%, a significant increase from its 20% visit share in the first quarter of 2019, according to Placer.ai.
But year over year, Chipotle’s visits grew 0.7% in the second quarter, only slightly outpacing the 0.5% growth in visits for the wider fast-casual segment.
And, Placer.ai noted in a recent report, Chipotle’s average visits per location fell 6% in the second quarter, even as visits per venue remained flat for the fast-casual segment as a whole. Placer.ai blamed Chipotle’s dip in part on the lapping of the successful Chicken al Pastor launch last year, and the shift in the Easter holiday.
But Hottovy said it has become a more competitive environment for the fast-casual sector, and chains are seeing more pushback from lower-income consumers, in particular, who are finding alternatives for meals, whether that’s trading down to fast-food deals or finding meals at grocery stores.
Given how Chipotle’s loyal fans have come to expect something special around Halloween, extending the seasonal perks for the whole month is a smart move, Hottovy said.
But the challenge with ramping up promotional activity is finding the right balance. Having more promotions isn't always a good thing.
“At what point does it lose the appeal?” he said. “You can have too many promotions diluting your own promotions.”
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