Chipotle Testing Kid-Friendly Options and Other Menu Changes
After 16 years of staying relatively the same, Chipotle Mexican Grill is toying with some significant changes to its menu, including kids meals, smaller portion options, soups and salads.
The plan is just in the testing phase, and only in Denver, company founder and co-CEO Steve Ells said in yesterday’s Q1 earnings call. And the company is in no rush, he added. “We’re going to really dig in and make sure we understand what part of that test delivered good results and what things might not be applicable for roll out.”
The burrito chain is also testing new entree options and featured items. Chipotle’s research in 2008 showed that the current menu format, in which customers build their burritos out of a list of ingredients, “leads to a perception of limited variety and is often very intimidating to new customers,” Ells said. So in the Denver tests, the company will play with ways to “offer suggestions to customers who do not understand how to customize their order.” But Ells cautioned analysts to keep in mind that “we are in the very early stages of this test. We will learn a lot from it, but we know that it’s unlikely that we will love everything about it.”
Chipotle reported positive results for the first quarter, with revenues up 16.1 percent over the same period last year. Its October price increases provided a boost, though customer visits also declined.
“It’s very difficult to quantify how much of the decline in traffic is due to the economy and how much is resistant to our price increase,” said CFO Jack Hartung. “This is especially true because we began to see traffic declines in the third quarter of last year before the price increase.”
“In hindsight had we known everything we know now we may have taken a different approach, at least a slightly different approach to the way we raised prices,” co-CEO Monty Moran admitted.
In addition to the menu change testing, Chipotle has been working on a new advertising campaign, called My Chipotle, which will debut next month.
Katherine Glover is a Minneapolis-based print, radio and online journalist. She's written for Salon.com, Sierra Magazine and many others, and she does a weekly blog on immigration issues for MinnPost.
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