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Booming Online Chipotle Sales Open the Door for New Growth Areas

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Booming Online Chipotle Sales Open the Door for New Growth Areas

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Chipotle’s online business soared during 2020, making up more than half of sales. With that, the digital boom is likely leading the company to consider more drive thrus and introduce breakfast options.

DRIVE THRUS COULD LEAD TO BREAKFAST ROLLOUT

Chipotle opened its first “Chipotlanes” in 2018 as part of its push into digital ordering. The drive-thru lanes are only for digital order pickup to cut down on the chain’s indoor lines and speed up service.

According to a BTIG analyst note, Chipotlanes could help the company get into the breakfast business, reported MarketWatch (Jan 11). “We estimate this format could reach more than 1,000 units over the next five years, allowing the company to expand its operating hours (late-night) with limited incremental costs and potentially open the door for new dayparts like breakfast,” BTIG said. “We view Chipotlane as the next generation drive-thru experience that should serve as a cornerstone of future unit growth.”

BTIG said that restaurants with Chipotlanes generate 10% higher sales than those without one, and it expects further expansion as digital adoption and consumer awareness increases. Chipotle could potentially offer a digital-only breakfast menu that is handled by three-to-four employees for several hours in drive-thru locations with dining rooms closed.

BTIG, which recently raised Chipotle’s price target to $1,600 from $1,450, also said Chipotle’s investment in drive-thru restaurants will allow the company to unlock greater menu innovation and strengthen new unit returns. Analyst Peter Saleh said this format could reach more than 1,000 units over the next five years.

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BOOST IN CHIPOTLE HIRING ACTIVITY

To keep up with exploding digital sales, Chipotle is also going on a hiring spree. The company is holding a nationwide hiring event on Jan. 14 where it aims to fill 15,000 roles to further expand operations, reported Fox Business (Jan. 11).

The company also promoted nearly 11,000 employees during 2020. “We are fortunate to be experiencing growth during this unique time and want to safely provide an opportunity for purpose-driven individuals to join us on our mission of cultivating a better world,” said Marissa Andrada, Chipotle chief diversity, inclusion, and people officer.

Back in May of last year, the company began a campaign to drive hiring, resulting in about 8,000 new employees, reported CNBC (July 15, 2020). A few months later in July, it again pledged to hire 10,000 more workers.

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