Chipotle improves throughput to pre-recession peak levels
Chipotle Mexican Grill moved customers through its service line faster and more efficiently than ever before during the first quarter, indicating that company efforts to improve throughput are working, officials said Thursday.
After reporting a seventh consecutive quarter of double-digit same-store sales growth, company officials told analysts during a conference call that the chain has surpassed its goal of restoring transaction counts per hour to previous peak levels of 2007, something the company has been focused on since November.
During the quarter ended March 31, same-store sales during peak weekday lunch and dinner hours were growing faster than the rest of the day, said Monty Moran, Chipotle’s co-chief executive. “Our teams are now faster than they have ever been for this time of year,” he said.
Company efforts to improve throughput have included:
• Training employees to prepare “mise en place,” or having everything ready before peak hours begin
• Having “aces in their places,” or all staffers in position to serve guests
• Having an expediter, the person who stands between the last burrito wrapper and the cashier, in place during all peak hours to bag meals and allow the cashier to focus on cashing out
• Having a line backer in place, typically a general manager or service manager, who stands behind the line and makes sure pans are full of food, the line looks clean and workers have the tools they need without having to look away from guests
Moran said the company rolled out a video on throughput that demonstrates how a line should move and what a well-run team looks like. The video, taken at a busy downtown Chicago location, shows that effective throughput does not look frenetic, spastic or disorganized, but there are no wasted movements. If errors are made, they are caught quickly and corrected, and the workers appear calm, competent and have fun, he said.
The aim of these efforts is to get guests through the line efficiently, have team members make eye contact and communicate better with guests, and serve hotter and fresher food, noted Moran.
“Speed is not the first goal of throughput,” he said. “The first goal is to provide the very, very best customer service, with great eye contact, great communication, and a polite and efficient way with customers. All of those things, when done well, tend to lead to very, very fast service."
While the first quarter is typically the slowest time of year for Chipotle, Moran estimated that improvements to throughput added another five transactions to the peak lunch hour average of about 100 transactions during the quarter. That number may increase in the second quarter, which is traditionally busier for Chipotle, but Moran cautioned that increases in transactions may not directly impact same-store sales—at least, not immediately.
“That’s something that we believe, over time, will improve as a result of great throughput, but it’s not an immediate reaction,” he said. “If people want to come to Chipotle more often, we want to do all we can to reward that decision with an incredible guest experience, and a large part of that incredible guest experience is throughput.”
Steve Ells, Chipotle’s founder and co-chief executive, said the chain made another “significant leap” during the quarter in educating consumers about its commitment to quality ingredients from sustainable sources. The company will continue to expand on its “Cultivate” marketing platform, which will include day-long festivals planned for Denver and Chicago this year and other nontraditional efforts.
Chipotle will continue to focus on ingredients by making a series of food improvements. The company will add more whole wheat to tortillas to improve nutritional content and flavor, Ells said, and by the second quarter will only use sour cream sourced from pasture-raised cows. In addition, the company is trying out in Portland and New York an improved soft corn tortilla with a mix of white and yellow masa flour and is testing a new process for cooking beans to make them more consistent.
The company has two restaurants open in the U.K. and three more scheduled there before the end of the year. The first location in Paris is on track to open this spring, and a location in Toronto opened during the first quarter with two more planned there this year.