Chipotle’s same-store sales turned negative for the first time since 2020, and economic uncertainty is the primary culprit.
A visitation study confirmed as much. The fast casual—which saw comps dip 0.4 percent in due to lower transactions of 2.3 percent, partially offset by a 1.9 percent increase in average check—found that concerns around the economy were the “overwhelming reason” guests were cutting visits to restaurants, according to CEO Scott Boatwright. Chipotle began feeling this trend in February, and it’s continued through April. Poor weather during the first quarter didn’t help either.
The second quarter will be tough as well with Chipotle lapping an 11.2 percent comp in Q2 2024, including high teens in April 2024. The company is also rolling off about 90 points of price and facing another 100-basis-point headwind due to the timing of Easter. The slowdown appears broad-based—not tied to any income cohort or region.
Judging by current underlying trends, the brand expects a low single-digit full-year comp and a return to positive transaction growth in the latter half of 2025.
“While we can’t predict how long these consumer headwinds will last, what I do know is that the Chipotle brand has never been stronger,” Boatwright said during Chipotle’s Q1 earnings call.
There are reasons for Boatwright’s optimism. For instance, Chipotle’s survey shows it ranks top three in a record 15 perceptual drivers of consumer visitation and that it leads in key areas like “good amount of food for your money” and “quality ingredients.” It moved into second place around “cares a lot about the customer” and “customer care/satisfaction”—feedback the brand hasn’t seen before. When it comes to employees, turnover is holding steady at all-time lows, and staffing levels are at all-time highs.
Boatwright isn’t worried about fast-casual competitors either. He noted that Chipotle is on track to open the same amount of restaurants this year alone (315 to 345 restaurants), similar to a typical competitor’s entire footprint.
“We look at our fast-casual competitors. We often monitor their performance in the marketplace, their performance relative to ours. What gives me a lot of confidence is we have competition, as you can imagine, that opens up near or in close proximity to Chipotle’s today, and we don’t see any material impact to our business,” Boatwright said. “As a matter of fact, in most cases, we see an increase in traffic to the area, and we garner more than our fair share. And what I attribute that to is an extraordinary value proposition, a speed at which our competitors are hard-pressed to manage or at least even compete with. And that gives me a lot of confidence regardless of what’s happening in the marketplace. The Chipotle brand has never been stronger. Our value proposition has never been greater. Our food has never been better and our speed is unmatched.”
One bright spot has been the Chipotle Honey Chicken, which has had a higher mix than any other LTO and even surpassed its two-market pilot test. The innovation is driving incremental transactions and “overwhelmingly positive” guest feedback.
Chipotle will follow up this success with further investment in marketing spend beginning in May and throughout the summer. This means more menu innovation increased advertising in digital and social channels, and using the loyalty program to target specific cohorts and group occasions.
“We took a hard look at summer seasonality. The last couple of years, we’ve seen a step down in the business during that summer timeframe. And what [CMO Chris Brandt] and the team have come up with is a plan that will reach consumers and keep us relevant with our consumers more consistently throughout the summer,” Boatwright said. “And we’re looking at it as return on ad spend obviously. And Chris and team are hyper-focused on returns with the marketing spend … Linear TV as you know just doesn’t work as hard for us or isn’t as efficient in the summer months. But thinking about what’s possible with regard to streaming social activations or just reaching the consumer in a different way during the summer months and some digital activation—to add top spend from our digital team—I think it will have a meaningful impact on the summer.”
When more customers come in, Chipotle wants to be prepared with better throughput. A growing number of restaurants have an expo person available, which helps with preparation and properly deploying labor during peak periods. For perspective, Chipotle starts its prep process at 6 or 7 a.m. so that it can finish by the time it opens at 10:30 a.m.
The next big unlock, Boatwright says, is back-of-house equipment. Produce slicers will be in all restaurants by this summer, which should improve speed and culinary by ensuring consistent cut sizes for onions, bell peppers, and jalapeños. Additionally, Chipotle is expanding the launch of an equipment package that includes a dual-sided plancha, three-pan rice cooker, and high-capacity fryer. This package will be part of all new restaurants opening in Q4 and later; it will also be introduced at 100 existing locations over the next few months. Boatwright said Chipotle can accelerate the rollout to all restaurants over the next several years.
The chain is also making progress with its Autocado (robot that cuts, peels, and cores avocados) and its automated digital make line. Both were tested in restaurants, but returned to Chipotle’s innovation center for further enhancements. The Autocado is now back in restaurants while the automated make line will return to in-store testing this summer.
“While we do anticipate that we will realize efficiencies from these initiatives, some of this will be invested back into our restaurants to enhance the experience for our teams and our guests,” Boatwright said. “This will enable our crews to be properly deployed during peaks, driving better throughput and a better guest experience. It will also improve and drive better consistency across culinary, which is key as we continue to scale this great brand.”
Boatwright also believes that “smiles down the line don’t slow us down,” meaning he wants employees to double down on hospitality. That’s in addition to cleaner dining rooms and drink stations and better guest recovery for any issue. Restaurant leaders have already spread the new message and rolled out training tools across the company’s nearly 3,800 restaurants.
“While it will take time to build the guest-obsessed culture across 130,000 team members, I am confident that we can do this and it will further strengthen our industry-leading value proposition at a time when our guests appreciate it most,” Boatwright said.
The company is also rethinking its catering business, which mixes just 1.5 percent with little to no marketing. Chipotle plans to launch a catering test this fall featuring the new equipment package, additional storage, and new technology to allocate orders and drive demand. Through this pilot, Chipotle will determine whether it can scale catering without impacting its core business.
Chipotle finished Q1 with 3,781 company-owned restaurants (3,697 in the U.S.) and $3.19 million AUV.
