Chief executive officer Brian Niccol identified convenience as one of Chipotle’s biggest growth areas. Even with more than 2,400 stores, Niccol estimated nearly 50 percent of customers aren’t aware of the chain’s digital and ordering efforts.
Well, this initiative will be hard to miss.
Chipotle and DoorDash announced an extensive partnership Monday (April 30) that will make delivery available from more than 1,500 Chipotle restaurants across the country—its biggest push to date.
“Delivery is an important way we are making Chipotle even more convenient and accessible to our customers who want to get Chipotle delivered right to their home, office, or wherever they are," Curt Garner, chief digital and information officer at Chipotle, said in a release. "By partnering with a delivery leader like DoorDash, we are making it even easier for customers to enjoy all the real ingredients that make up our delicious food."
Chipotle is bringing the partnership to market with a significant deal. On orders of $10 or more through May 6, including Cinco de Mayo, Chipotle will offer free delivery. Delivery on qualifying orders will be free during regular operating hours using the promo code GETCHIPOTLE at checkout.
"We strive to offer our customers the best selection possible," Christopher Payne, chief operating officer of DoorDash, added in a statement. "Our ability to deliver such delicious and requested food from restaurants like Chipotle, while keeping quality at the forefront, has enabled us to become a leader in this industry."
Niccol, the former Taco Bell CEO who joined Chipotle March 5, brought up delivery several times during the company’s first-quarter earnings call on April 25. But he didn’t leak any details of the DoorDash deal.
“We are also upgrading our capabilities to innovate across our business. Specifically, we will provide greater consumer access including through delivery and catering, enhance the digital experience, innovate around our menu, and improve our restaurant design,” he said.
The chain earned $2.13 per share on $1.15 billion in revenue, which crushed Thomson Reuters’ estimate of $1.57 per share on $1.147 billion in revenue. Comparable same-store sales climbed 2.2 percent, year-over-year, topping StreetAccount’s call of 1.3 percent.
This appears an ideal time for Chipotle to launch the service. Mobile sales grew 41 percent, year-over-year, in the first quarter. Digital sales boosted 20 percent to 8.8 percent of total sales.
“The surge in mobile sales since relaunching our app late last year gives us confidence that our customers appreciate the great experience,” John Hartung, chief financial officer said in the call.
“Our delivery sales continue to grow at a rapid pace. And when our delivery partners offer free delivery at Chipotle to build their customer base, our customers respond in a big way, as they did during Super Bowl weekend when delivery volumes increased nearly 250 percent,” he added.
Chipotle also uses Postmates and has delivery live in about 660 restaurants. DoorDash in active in more than 800 cities across the U.S. and Canada. It’s the platform Wendy’s teamed with to bring its delivery program nationwide.
DoorDash integrates directly into restaurant’s point-of-sale systems. Chipotle’s expansion of its second make-lines should also help the process.
This past February, Chipotle said it plans to spend $45 million to retrofit new make-lines at about 30 percent of its restaurants in an effort to increase the amount of digital orders that can be processed. These digitally enhanced second make-lines will be in about 1,000 restaurants by the end of the year.
Niccol said digitally enhanced second make-lines are in 237 Chipotles currently. In those units, order accuracy has improved and driven a nearly 20 percent improvement in customer feedback.
Hartung said the majority of second make-line orders are app and web orders, but also include third-party delivery orders and catering.