And a move to Southern California. But we already knew about that.
Those are my initial thoughts from the special investors call Chipotle and its sort of new CEO Brian Niccol held after the markets closed yesterday.
First, the stores. Store closings will garner headlines, but in this case, it’s a good thing. The number is relatively small – 55 to 65 – half of which will close in the next 30 days, and the rest will close this year. That’s roughly 2.5%. And with nearly 2,400 US stores, all company owned, why not identify some really poorly performing stores with little chance of success and close them? Many of the largest restaurant chains see franchisees cash in their chips at a similar rate each year (a state of affairs we track at Chain Store Guide via our franchisee locations project). That said, Sioux really needs a Chipotle.
Now for the energy and fun, two qualities Niccol leveraged at Taco Bell to build a vibrant culture and drive customer engagement through the roof. Last month’s announcement that Chipotle would move its headquarters from its spiritual homeland of Denver to Newport Beach combined with the rapid pace of the initial round of store closings certainly doesn’t qualify as fun for the hundreds of employees that will lose their jobs, but it does speak to the energy and grand plans Niccol has for the organization.
From a tactical perspective a lot of good things were said. Drawing from the Bell playbook, better digital and better menu product development were high on the list, the latter of which Chipotle has struggled with recently (queso, anyone?). Drive thrus, delivery and pick up also made the cut.
All good and as you’d expect. But now for the execution. I, for one, see Niccol and Chipotle succeeding and can’t wait to see what the creative and marketing teams come up with to convey this new sense of energy and fun.