Need to Know
- The fast-food chain saw a 177.2% year over year increase in digital sales in Q4, hitting $781.4 million.
- Digital sales accounted for nearly half of all sales and were split evenly between delivery and pickup.
- Chipotle plans to integrate Chipotlanes, its mobile order drive-thru lanes, into 70% of its new restaurants in 2021.
- Chipotle’s digital loyalty program added 10 million members in 2020, hitting 19.5 million members in total.
Chipotle posted another quarter of substantial digital gains, reporting a 177% year-over-year increase in online sales.
Overall digital sales hit $781.4 million for Q4, accounting for nearly half of all the restaurant’s sales, which were split 50-50 between delivery and pickup. A significant portion of Chipotle’s order-ahead business came from Chipotlanes, drive-thru lanes where customers pick up mobile orders. According to CFO Jack Hartung, 62% of new restaurants in 2020 had Chipotlanes; the company’s goal in 2021 is for 70% of the company’s 200 planned new restaurants to have a Chipotlane.
The company currently operates 170 Chipotlanes, and Chipotle CEO Brian Niccol also noted that locations with a Chipotlane post 10% more digital sales than those without one.
Niccol also said on an earnings call that the company’s full-year sales in 2020 grew 7.1%, hitting $6 billion. The company opened 161 new restaurant locations in 2020 and hit total digital sales for the year of $2.8 billion, up 174% over the previous year.
Niccol said that the company plans to continue experimenting with digital-only restaurants, having opened the first digital-only location, in Highland Falls, New York, late last year. “It’s early days but this location has outperformed our expectations thus far,” Niccol said.
In addition to new infrastructure and store designs, Chipotle is also driving digital orders through its loyalty program, which grew by 10 million users in 2020. The program now has about 19.5 million enrolled members. Niccol said there are “further enhancements” to Chipotle’s loyalty program “planned in the coming months that we expect will continue to drive frequency increases across our customer segments.”
On average, each Chipotle location brought in $1.1 million worth of digital sales over 2020.
“During the quarter, about half of the digital sales came via order-ahead and pickup transactions or digital pickup orders as we refer to them with the remainder coming from the delivery channel,” said Niccol. “However, our overall digital mix moved up about 50% late in the quarter as COVID restrictions toughened, largely driven by an increase in digital pickup orders.”
Chipotle hit a number of digital-sales milestones throughout 2020, as the company’s commitment to digital infrastructure, coupled with its innovative store design, drew customers towards online ordering. By July, digital orders comprised roughly 60% of Chipotle orders, and in October, the company posted its strongest digital quarter to date, earning $776.4 million in online sales in Q3—a figure that’s particularly remarkable considering Chipotle’s Q1 digital sales were just $372 million.