Chipotle Mexican Grill Inc. says adding new items to a menu that’s barely changed in 25 years will help turn around struggling sales. The problem is finding the right one.
Founder and Chief Executive Officer Steve Ells said on Tuesday that the burrito chain may try salads and grains, as well as more traditional Mexican fare like nachos and adult-size quesadillas. Ells spoke on a conference call after Chipotle reported that customer traffic fell in the fourth quarter and has remained down this year.
Investors may cast a skeptical eye on Chipotle’s latest effort to expand beyond its signature made-to-order burritos. Its new queso dip was slammed on social media last year for its grainy texture, prompting the chain to reformulate the item. And even though queso is credited with boosting average ticket price, it’s not clear that it’s attracting more customers.
Chipotle’s test of bunuelos, a fried-tortilla dessert, was also a flop, sending executives in search of new sweets to entice diners. And it also ditched chorizo last year after touting the product in 2016.
Ells acknowledged that introducing new foods while maintaining speedy service is “tricky.” That’s why the chain is using its New York-based Next Kitchen restaurant to try out different fare.
“We did it so we could cycle things in and out to test, and that continues to be the plan there,” spokesman Chris Arnold said.
Once known as the industry’s golden child that could do no wrong, Chipotle has recently been rocked by setbacks that go beyond menu variety, including E. coli outbreaks, norovirus, a data breach and a viral video of mice at one of its stores. Whether the Denver-based chain can regain its footing may depend on a new menu hit.
“There are exciting new offerings,” Ells said. “It’s something that we’re working really hard on.”
©2018 Bloomberg L.P.
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