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Chipotle gets more traditional

Blog: With new hires, new products, chain turning to more traditional methods to boost business

This post is part of the On the Margin blog.

For a chain that prides itself on being a different fast food chain, Chipotle Mexican Grill Inc. sure is using a lot of traditional fast food strategies in a bid to bolster its sales.

On Monday, the company hired Laurie Schalow, former executive with Yum Brands Inc., to be its chief communications officer. 

In May, the chain hired former Arby’s executive Scott Boatwright to be the company’s first chief restaurant officer.

That’s not all. In fact, Chipotle has started using strategies that many of its competing executives would find familiar as it works to bolster sales after a brutal 2016.

The company that had long eschewed new product offerings in a bid to keep things simple appears headed to a long-demanded nationwide Queso promotion this fall. It’s also working on a dessert product, and has started a location in New York City for the specific purpose of testing out new ideas.

Last year, Chipotle gave away a lot of burritos in its bid to get back into customers’ good graces following a series of foodborne illness outbreaks in 2015. It has given away more burritos periodically ever since.

Perhaps the biggest change came in April, when Chipotle released its first ever national television campaign. Chipotle had long preferred alternative ad strategies — notably its own produced videos and even a television series. 

All of the company’s more recent moves are understandable and, many would argue, necessary, particularly when it comes to operations and communications.

Chipotle’s unit volumes fell by 23 percent last year, and nothing gets companies to rethink long-held views like plunging sales.

Chipotle’s one-time mentor, McDonald’s Corp., had long resisted demands to serve breakfast items all day, until its same-store sales fell for three years straight and activist investors began sniffing around the company and its board. The move had largely worked, bolstering sales for a time and giving executives some breathing room to develop more long-term sales strategies. 

Similarly, McDonald’s long preferred to hire executives from within, boasting a c-suite loaded with people who started as crew members. That changed, too, and the chain has infused its executive ranks with outsiders.

The fact of the matter is, many of the strategies that Chipotle is using now are common strategies because they often work. Restaurant chains frequently use innovative products to bring in new customers; many companies use national ads to successfully generate sales and executive changes frequently bring new life to a company.

Whether the efforts will work for Chipotle, of course, remains to be seen. The chain has a long way to go to recover its model. And even now, two years after the first outbreaks hit the company, its reputation remains far from where it once had been. 

Jonathan Maze, Nation’s Restaurant News senior financial editor, does not directly own stock or interest in a restaurant company. 

Contact Jonathan Maze at [email protected]

Follow him on Twitter: @jonathanmaze

TAGS: Fast Casual
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