Coming this spring: Dessert at Chipotle?

Company says improved customer service, fundraisers and maybe even dessert could boost sales

Chipotle Mexican Grill Inc. might spring dessert on its customers.

The Denver-based burrito chain, looking to recover from what it acknowledged was the worst year in its 23-year history, could put a dessert on the menu as soon as this spring.

Speaking at the ICR Conference in Orlando, Fla., Tuesday, Chipotle chief marketing officer Mark Crumpacker told investors that the company has a dessert product it likes, and that would have a “minimal impact on operations.” 

“We may introduce this into restaurants in the spring,” Crumpacker said. “It only has one ingredient not already found in the restaurants. It’s easy to prepare. It’s delicious.”

Such a move would be rare for Chipotle, which prides itself on a customizable menu that lets customers order a wide range of offerings with the same ingredients. However, the chain is looking at new avenues in a bid to recover sales lost in 2016 following a foodborne illness outbreak. 

Chipotle said Tuesday that preliminary same-store sales fell 4.8 percent in the fourth quarter, but improved to a 14.7-percent increase in December, when it lapped a 30-percent decline a year ago.

“2016 was indeed a challenging year for us,” Chipotle CEO Steve Ells said at the conference. “It was the most challenging in our 23-year history.”

Chipotle detailed several strategies at ICR that it said could help improve sales and restore the profitable economic model that made it the envy of the restaurant industry and inspired the creation of hundreds of fast-casual concepts.

Dessert was only a small part of that, and Crumpacker said investors “shouldn’t expect us to begin adding a series of menu items” to recoup sales. But he said Chipotle is planning the largest ad campaign in its history, in April. It is also working to target lapsed customers who have yet to become frequent users of the brand again.

Chipotle is also aiming to boost digital capabilities such as online ordering and mobile payment. 

Another strategy is fundraisers. The company hopes that more fundraisers will bring in new customers to the chain. CFO Jack Hartung said that 40 percent of customers who come into Chipotle for a fundraiser hadn’t been to the chain in six months. 

Ells himself discussed improvements in customer service.

Last month, he suggested that Chipotle’s customer service was slipping, and that he was “not satisfied with the quality of experience” at some restaurants.

On Tuesday, Ells laid much of the blame for those problems on Chipotle’s famed Restaurateur program, in which high-performing employees could rise through the ranks, earning the coveted title and higher salaries.

Ells said that the program evolved into a “complex, time consuming process” that “didn’t result in better guest experience.”

He said the program had 27 different measures, most of which had nothing to do with the customer or operations.

“When teams focused on becoming a Restaurateur, they lost their focus on the customer,” Ells said. 

He also said that the company’s tools designed to improve its people culture underwent revisions over the years that were based on “abstract and esoteric concepts.”

“That left restaurant teams little or no time for basic things like training and customer service,” Ells said.

For instance, he said every crew member would interview each candidate for a job, which would require applicants be pulled off the line, and that applicants had to return to the restaurant multiple times.

As a result, he said the company had to review 17 candidates for every open position.

“That caused us to lose many good candidates,” Ells said.

Chipotle has streamlined its interview process and is focusing on training workers well. Ells also said the company’s Restaurateur status is now based on five measures, three of which deal with the customer experience inside restaurants.

“It’s made a big difference,” Ells said. “Many [locations] are already operating at a Restaurateur level.” 

Contact Jonathan Maze at [email protected]

Follow him on Twitter: @jonathanmaze

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