Chipotle Starts Testing Walk-Up Windows in Urban Areas

(Bloomberg) -- Chipotle Mexican Grill Inc., one of the best performers this year in the S&P 500 Index, is betting walk-up windows can boost its burrito sales.

The company is testing a sidewalk window in a new Chicago location this week. It’s across the street from Wrigley Field, so the idea is to distribute orders quickly among the crowds of hungry baseball fans. It’s part of a Chipotle redesign that will arrive at a few dozen restaurants next year.

In an interview at the location, Chief Financial Officer Jack Hartung said the window complements the chain’s efforts to attract more orders from online and mobile platforms. Digital sales have represented $1 billion in revenue so far in 2019, up 88% from the previous year.

The 2,000 square-foot restaurant is slightly smaller and has fewer seats versus an average Chipotle. It has a customer-facing grab-and-go beverage case, wood paneling and a new food-prep table that’s visible to customers in line. Pick-up shelves are near the front door for easy access.

Chipotle has seen sales accelerate and shares rally under Chief Executive Officer Brian Niccol, who took over in 2018 after a lengthy slump tied to food-related illnesses. Now on solid footing, the company is pushing digital ordering and delivery across its 2,600 restaurants, most of which are in the U.S. It’s also quickly adding drive-thru lanes. The walk-up windows are mostly planned for urban and warm areas, Hartung said.

Chipotle wants to more than double its presence in the U.S. Ultimately, the company can expand its total network to 5,600 locations, he said, but “it’s going to take us a number of years to get there.”

Chipotle will be competing with a resurgent Starbucks Corp., which is also expanding in the U.S., for the best real estate for restaurants with drive-thru access and walk-up windows, Hartung said.

Chipotle shares have gained about 92% this year. That’s more than three times the advance of the S&P 500, making it the fifth best performer on the index. Starbucks has jumped about 36% this year.

To contact the reporter on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net

To contact the editors responsible for this story: Sally Bakewell at sbakewell1@bloomberg.net, Jonathan Roeder, Lisa Wolfson

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