Chipotle is testing new restaurant designs. And, they reveal a lot about the future of the chain.
The fast-casual chain is opening four new restaurants with designs Chipotle has not used before, the company announced on Thursday. The new designs will be an urban storefront with a pick-up window and two new types of locations with drive-thru Chipotlanes.
The new locations are opening in Chicago, Cincinnati, and Phoenix – where there will be two new restaurants – with Chipotle additionally revamping two stores in Newport Beach and San Diego. Chipotle said in a press release that it will assess the performance of each restaurant, monitoring things such as transactions, customer feedback, and the ability to incorporate menu innovations in the future.
The new designs put digital orders front and centre, with walk-up windows and pick-up portals.
In November, Business Insider spoke with Chipotle executives about the chain’s digital aspirations. Digital is now a $US1 billion business at the chain, with digital orders accounting for more than 18% of sales in the most recent quarter.
According to Chipotle’s chief financial officer Jack Hartung, Chipotle was coming back from a “tech deficit” when CEO Brian Niccol joined the company in March 2018. A large part of the chain’s progress has been focused on its second make line, essentially a second assembly line for burritos and bowls.
Chipotle rebranded the “second make line” as the “digital make line” earlier this year, a small but purposeful tweak that reveals how important this line is to the future of Chipotle’s business. Chief technology officer Curt Garner said that the change was “really important because second seemed to make it less than, or perhaps an afterthought.”
Hartung says that even at locations where digital is 40% of sales, the second make line means the locations are still not at maximum capacity. Hartung says he expects digital orders to one day account for “30%, 40%, 50%” of Chipotle’s business. As delivery and mobile orders explode, the digital make line gives the company an advantage over competitors that are partnering with ghost kitchens.
Chipotle’s new restaurant designs clearly highlight the importance of the digital make line. Read on to see what the Chipotle of the future might look like.
The digital make line has been key to Niccol’s plan for the future of Chipotle.
“Brian came in and again, just helped make it very, very clear: We’re going to focus on a few things,” Hartung said. “We’re going to build a digital system and it’s going to involve finishing the digitising of the second make line.”
The make line is focused on mobile, delivery, and other digital orders.
Chipotle is testing making its digital pick-up area more prominent.
In addition to pick-up shelves, the digital make line offers new ways for customers to get their food on the go, such as with drive-thru Chipotlanes.
In October, Chipotle announced that it plans to open 60 more locations with drive-thru “Chipotlanes” by the end of the year, in addition to the 20 that are already open. In 2020, more than half of the 150 to 165 locations Chipotle aims to open will include a Chipotlane.
Most major fast-food chains, such as McDonald’s or Chick-fil-A,do 70% of their business through the drive-thru lane. Sales at locations with drive-thru lanes tend to be 30% to 40% higher than locations without drive-thrus, according to BTIG analyst Peter Saleh.
It also allows Chipotle to test new ways to pick up digital orders, such as walk-up windows.
Chipotle is also testing out a revamped interior.
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