Chipotle Posts Best Digital Quarter Ever, Growing Sales 80%

Need to Know

• While many restaurants are struggling during the COVID-19 pandemic, Chipotle has seen incredible growth in sales thanks to a focus on digital
• 2020’s Q1 results showed an 80% jump in digital sales, all thanks to mobile, pick-up, and delivery orders.
• Chipotle has also grown its rewards member base to just shy of 12 million.
• Digital accounted for 26.3% of sales for the first quarter of 2020.
• Chipotle is also working on attracting new customers through a partnership with UberEats and an expanded rewards program. 

Analysis

While many retailers and restaurants are doing everything they can to stay afloat amid the COVID-19 pandemic, Chipotle has reported a first-quarter digital sales jump of 80% — all thanks to a focus on loyalty and expanded purchase options.

In the early stages of calls for social distancing, the popular quick-service restaurant worked quickly to invest in digital and delivery design to increase convenient customer access. 

Chipotle launched a partnership with UberEats to allow customers another way to access delivery, and drive new diners to Chipotle who otherwise may not have ordered it. In celebration of the launch, orders were fulfilled with free delivery for a limited time. 

Chipotle CEO Brian Niccol said that delivery is the chain’s fastest-growing platform and that order-ahead business has more than doubled since the COVID-19 crisis took place. 

Chipotle can also credit some of its recent success to its newly-revamped rewards program, and 65% of newly-enrolled rewards members are new to the Chipotle brand, up from 51% pre-COVID. 

As Niccol explained in an earnings call, the company’s investment in digital is paying off, with online orders “currently accounting for nearly 70% of sales.” 

And the plan to attract new customers through online orders is working. In the final two weeks of March, digital sales grew 103%, and a survey showed that 15% of those orders were from customers who had used delivery for the very first time. 

2020’s first quarter represents the highest-ever digital quarterly sales, totaling $372 million. 

Now the famous burrito chain is working on harnessing its new base with “personalized offers to better engage and incent behaviors” and remains “focused on winning today while we cultivate a bright future for our employees, guests, communities and shareholders.”

In support of the fight against COVID-19, Chipotle is undertaking a number of charitable initiatives. The chain will celebrate National Burrito Day by gifting 100,000 burritos to healthcare workers on the front lines and will be donating 10% of sales to Direct Impact, an organization working to provide personal protective equipment and essential medical items to healthcare workers. Chipotle will also donate one burrito to a healthcare worker for every one purchased digitally from April 21st through April 26th.