Chipotle Mexican Grill’s second make lines for digital orders are now averaging $1 million in sales per unit annually—sometimes more, the fast casual’s CEO told analysts Wednesday.
That the chain is able to generate the average unit volume of many standalone restaurants from just a portion of its stores is no small feat and one that is giving Chipotle some extra runway during the pandemic.
“One of the things that’s been a nice benefit of all the growth in our digital business is we now have scale,” CEO Brian Niccol said during the chain’s Q2 earnings call Wednesday, according to a Sentieo transcript. “We’re doing over $1 million of business off this digital make line … and we’ve got some restaurants doing well beyond that.”
Chipotle began installing second make lines, which it calls Digital Kitchens, several years ago, to ramp up for off-premise expansion. Today, nearly all locations are equipped with the digital prep areas.
Digital sales rocketed up 216.3% for the quarter ended June 30 and now make up 60.7% of Chipotle’s total sales—a quarterly record for the Newport Beach, Calif.-based brand, the chain said.
Not only are the digital make lines allowing for greater throughput, they are giving the chain greater room for menu innovation, Niccol said.
“We have found is we can have success providing digital-only menu items,” Niccol said.
In April, Chipotle debuted a line of Lifestyle Bowls, available only via the chain’s app or website. The company is now testing quesadillas, also through digital channels.
“Once we started to get meaningful scale, we realized we don’t even need to put that challenge in front of our operators on the front line because we can run it through this digital business,” Niccol said. “And everybody gets a better experience. The team member has a better experience in the restaurant. The customer gets a better experience from a speed and having the product ready to go when they show up. And then operationally, it plays really well in our throughput initiative so that folks in the front line can really continue to stay focused on speed. And then our digital make line is really focused on being on time and accurate.”
The success of the digital make line will “open the door for additional innovation,” Niccol said. Such innovation could come via dayparts or menu, he added, all the while keeping throughput going strong on the main make line.
Given the success of Chipotle’s digital business, the chain said it is testing a variety of different store formats including some that are simply a freestanding drive-thru pickup-lane, which the company calls Chipotlanes.
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