Chipotle’s ‘if it ain’t broke, don’t fix it’ approach to its straightforward, simple menu might be doing it more harm than good. Deutsche Bank analysts express their concerns regarding Chipotle regaining its customers after recovering from E. coli and norovirus outbreaks.
Analysts Karen Short and Brett Levy downgraded the company from ‘hold’ to ‘sell,’ and write, “We believe [Chipotle's] success made them a bit complacent (although not with its desire to expand its store base or improve in-store operations) as the company’s lack of interest in innovation over the last decade has resulted in what we consider to be menu fatigue,” reports Business Insider.
Chipotle’s menu has remained relatively unchanged since its founding over two decades ago, the main exception being the introduction of tofu sofritas in 2014. The company writes in its 2014 annual report, “Chipotle restaurants serve only a few things: burritos, burrito bowls, tacos and salads. But because customers can choose from four different meats or tofu, two types of beans and a variety of extras such as salsas, guacamole, cheese and lettuce, there’s enough variety to extend our menu to provide countless choices.”
These ‘countless choices’ may no longer be enough for customers, as the analysts point out that same-store sales trends were already showing signs of weakness even before the E. coli outbreaks. They write, “The company dramatically trails its peers in the world of data analytics. Without the high levels of insight many of its competitors already have, we question how easily, how effectively or at what cost [Chipotle] will be able to locate and recapture its lost customers.”