Chipotle is making some permanent changes to its strategy after new discoveries it made during the pandemic.- The chain said it realized it could be much more precise when it came to portion control now that most customers are ordering ahead via its app.
- "Our portion sizes are much more consistent because there's not somebody pointing at every single pan ... the crew will see just the way that a customer is looking at them and think, 'Oh, I better put another scoop in,'" Chipotle Chief Financial Officer Jack Hartung said this week.
Chipotle is discovering that a few things about its business have changed for the better during the pandemic.
Brian Niccol, Chipotle's CEO, and Chief Financial Officer Jack Hartung spoke about the recent discoveries at the Raymond James North American Equities Conference on Thursday.
"The extra costs of COVID are definitely higher than the savings. But there are a couple of areas that we are seeing savings, and we do think that some, maybe all of it, will stick," Hartung told Raymond James analyst Brian Vaccaro.
The cost-cutting change that is most likely to resonate with the average Chipotle customer is the question of portion control — or how much chicken or salsa you get when you order your burrito.
While you can adjust how much of each ingredient you want when ordering on the chain's app, Hartung said, the amount of each ingredient served is much more precise when employees are shielded from customers. The only way for a customer to get more than the standard size is to ask — and pay — for extra.
"We're not restricting what the customer is allowed to do, either in terms of portion or in terms of adding additional ingredients," Hartung said. "But our portion sizes are much more consistent because there's not somebody pointing at every single pan ... the crew will see just the way that a customer is looking at them and think, 'Oh, I better put another scoop in.'"
"We're finding things like that are resulting in better controls at the food line," Hartung added. "We do think, certainly, because digital will be more sticky, a lot of that will stay. But we also think it's an opportunity for us to get better execution on the front line as well as people ordering in restaurant."
Chipotle executives mentioned a few other learnings that would likely result in long-term changes.
With more delivery orders, the chain has cut back its delivery fee and instead raised prices on delivery menus by roughly 7%. Advance ordering gives employees time to prepare the quesadilla, which can slow down the traditional assembly line, at locations where the menu item is being tested as a digital-only option. And Chipotle is planning to accelerate store openings as other restaurants' closures present new real-estate opportunities.
"The pipeline building is going very well, better than it would have if there wasn't COVID," Hartung said. "And you hate to say that COVID — that there's a silver lining to it, but there are things that you can take advantage of while we're navigating through this challenge."