Chipotle Mexican Grill Inc. has big plans to diversify its business. It recently announced that it will open its first ever location that sells burgers and fries in Lancester, Ohio, this fall. The announcement was made through an e-mail on Thursday.
According to the e-mail, the Tasty Made location in Ohio would only sell milkshakes, burgers and fries. It is a surprise move coming from chain which so far has sold only burritos and other Mexican foods.
The decision may have something to do with the E. Coli outbreaks that shook the business over the last 12 month. Because of the food safety issues, sales began to slip last fall and the company found it harder to win its customers back. One of the most notable attempts happened this February when the fast-casual chain pledged $40 million worth of free burritos, fries and salsa.
Yet despite nationwide efforts to revive sales including free burrito coupons delivered through social networking sites and customer e-mails, sales remained 24 percent down in the last quarter. The restaurant chain recently said that it would adopt a “more conservative lens” in the way it runs operations.
Under the new turnaround plan, Chipotle will add up to 235 new locations to its existing 2,000 plus restaurants worldwide. Earlier this year, it registered the “Better Burger” brand and said that its current business model can be applied to other cuisines too.
You can already buy Asian food from Chipotle in 15 restaurants called ShopHouses and pizza from five restaurants dubbed Pizzeria Locale. The chain’s chief executive Steve Ellis said that the comapny plans to get back to the origins with the new burger concept. Ellis explained that older burger chains thrived on “focused menus” which is exactly what the burrito chain plans to do.
Before the recent struggles, Chipotle had had a very promising future ahead as more and more new customers began to like the chain for its organic and locally produced approach. Between 2014 and 2015, it started to aggressively eat into McDonald’s market share as customers were gaining interest in locations that sell fresh food and allow them to customize their order.
In response McDonalds rolled out a Create Your Taste concept in some locations where consumers are able to customize their burgers. The burger chain declined to say how successful the concept is and whether it has plans to expand it to other restaurants.
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