Chipotle Announces First Digital-Only Storefront

Need to Know

• The pick-up and delivery-only restaurant, called Chipotle Digital Kitchen, will open on November 14 in Highland Falls, NY.
• Customers must order their food in advance via Chipotle’s app or website, or via third-party couriers such as UberEats.
• The new design will allow Chipotle a stronger foothold in urban centers where large restaurants are not possible.

Analysis

Chipotle has announced plans to open its first-ever digital-only restaurant this coming Saturday in New York State.

The restaurant, called Chipotle Digital Kitchen, will be located close to a military academy in Highland Falls, NY. It will have no dining room or front service line; customers will have to order their food online, via Chipotle’s app or website, or by using a third-party food delivery company such as Doordash or UberEats. Orders are picked up from a lobby that is designed to feature all of the sounds, smells and kitchen views of an ordinary Chipotle restaurant, and the Digital Kitchen will also be able to accommodate large catering orders.

The Chipotle Digital Kitchen comes as digital restaurant sales have spiked at QSRs such as Chipotle, which itself now averages $1-million in digital sales per store in the US; as of July, digital sales comprised 60% of all orders for Chipotle.

In October, Chipotle CEO Brian Niccol said the restaurant’s digital sales could exceed $2.5 billion in 2020: “A reduction of dine-in services, more people working from home, increased advertising and digital awareness, recent partnerships with Uber Eats and Grubhub and expanded digital capabilities into Canada all have helped attract new customers into our digital ecosystem while increasing convenient access to Chipotle,” he said at the time. “At this sales rate, our average restaurant delivers a digital average unit volume of well over $1-million, up from just a few hundred thousand dollars per restaurant a few years ago.”

“The Digital Kitchen incorporates innovative features that will complement our rapidly growing digital business, while delivering a convenient and frictionless experience for our guests,” Curt Garner, Chief Technology Officer of Chipotle, said in a statement. “With digital sales tripling year over year last quarter, consumers are demanding more digital access than ever before so we’re constantly exploring new ways to enhance the experience for our guests.”

Chipotle designed the Chipotle Digital Kitchen at its Cultivate Centre, the company’s innovation incubator, located in Irvine, California. The Cultivation Centre is home to testing labs for Chipotle’s new menu items, as well as the Center of Excellence for Design and Construction, which features a development lab, metal cutting and woodworking machinery where new restaurant equipment and prototypes can be tested before they are rolled out at Chipotle locations.

Other QSRs have been revamping and revitalizing their physical restaurant design in response to the growing demand for contactless, digital ordering and delivery. Burger King’s “Restaurant of Tomorrow” concept, which will feature dedicated curbside delivery parking spots, pickup lockers, and multi-lane drive-thrus, among other contactless options, and will be 60% smaller than typical Burger King restaurants, will roll out in 2021. Taco Bell, too, has a pickup and delivery-focused design, Go Mobile, which will include a mobile-only pickup lane and a smart kitchen, will make its physical debut in the first quarter of 2021.