Chipotle in July 2023 did something it hadn’t in three-plus decades of history—sign a development agreement. Year end, the brand operated some 3,400 U.S. units, with all of them corporate run (there are also about 41 in Canada, 19 in the U.K., a couple in Germany, and six in France). The deal with international franchise retail operator Alshaya Group promised to spread the chain to Dubai and Kuwait before expanding further across the region.
While Chipotle noted it wasn’t planning to ignite franchise development stateside, it was open to exploring opportunities for growth via outside partnerships, and was taking proposals on its site. Chipotle formed a new business development group directed by chief business development officer Nate Lawton, who helped bring the virtual Farmesa brand to market, to oversee the approach.
Chief among its targets was international, as the Alshaya Group deal showed.
On Monday, Chipotle unveiled the first of those units, which marked the chain’s first new country entry in more than a decade. The Kuwait store also came to market under Chipotle’s fresh design format (also a first), a model that focuses on order variety in-store.
The Alshaya Group, an organization that runs Starbucks, P.F. Chang’s, Pinkberry, Shake Shack, Cheesecake Factory, Blaze Pizza, Bouchon Bakery, Raising Cane’s, and Texas Roadhouse locations, expects to open four Chipotles in 2024. Dubai is coming later in the year.
This new location is located at The Avenues, Kuwait’s largest shopping mall that features north of 1,100 stores and about a million visitors per week.
It’s operated with adjusted hours since the start of April and will hold a grand opening Tuesday.
As noted, it’s a restaurant that could portend future development for Chipotle from an access standpoint. It features three ordering methods. Guests can take the traditional approach by walking down the front makeline, ingredient by ingredient. But they can also tap a kiosk ordering system that executes pickup orders and enables menu exploration for first-time guests, Chipotle said.
Lastly, there are QR codes at the tables that bring up the Alshaya Chipotle mobile app for pickup orders. The brand said it’s “especially convenient for large families ordering multiple entrees.” Simply, diners are able to sit down and order without getting in line, like McAlister’s Deli and other brands that have implemented “tableside ordering.”
The quesadilla will be a digital-only menu item as well, available via the kiosk or mobile app.
Design wise, the store features new materials, textures, and artwork intended to amplify Chipotle’s “Food with Integrity” branding, while also paying homage to some old designs.
This includes a wood tile floor that replaces the standard concrete approach; a “Corten Art Wall” that transforms legacy architectural material into a focal point that heroes the Chipotle pepper; a Corten Ceiling Element, which is a large-scale metal ceiling and lighting feature that creates a layer of visual richness, Chipotle said; and new wall finishes that are more textural and work to impart a feeling of freshness.
“In partnership with Alshaya Group, we worked tirelessly to ensure that we delivered an exceptional first impression in Kuwait with our freshly prepared menu of real ingredients and we are encouraged by the early results,” Lawton said in a statement. “Together, we’ll continue to gather insights on regional preferences and adapt accordingly as we grow our presence in the region and expand upon our mission to Cultivate a Better World.”
Added John Hadden, CEO of Alshaya Group: “Consumers have long awaited Chipotle’s arrival here in the Middle East and the feedback we’ve received so far has confirmed that we’re delivering the same delicious culinary experience that guests have had in their U.S. locations. We’re proud to have introduced this popular American restaurant to Kuwait and we’re looking forward to Dubai later this year, as the first locations in our exclusive partnership with Chipotle.”
The brand posted same-store sales gains of 8.4 percent in Q4, what BTIG analyst Peter Saleh called “one of the most impressive quarters that Chipotle has posted in several years.”
That 8.4 percent result included 7.4 percent transaction growth as average ticket rose 1 percent on 2.5 price.
Chipotle opened 121 restaurants in Q4—the most it’s ever put down—and 271 for the year, also an unprecedented figure. Of those 271, 238 included a Chipotlane and the brand expects 80 percent of its 2024 plan (285–315 new restaurant openings) to feature the channel.
Chipotle ended 2023 with 3,437 units as revenue reached $9.9 billion, an increase of 13.4 percent versus 2022. Across the full fiscal calendar, comps climbed 7.9 percent on transaction growth of 5 percent and average check lift of 2.9 percent. Digital sales reached 47.4 percent of F&B revenue. Restaurant margin expanded 140 basis points to 25.4 percent.
