Chipotle Goes All-In on Takeout With New Digital-Only Venue

(Bloomberg) -- Chipotle Mexican Grill Inc. is opening its first digital-only restaurant in the U.S. this weekend as it leans into the pick-up and delivery model customers increasingly want.

The concept, located in Highland Falls, New York, requires customers to order in advance online or through a third-party delivery company, it said. Orders can be picked up from a lobby that it says will have the “sounds, smells and kitchen views” of a traditional restaurant. The model will allow Chipotle to enter more urban areas where a full sit-down restaurant doesn’t make sense, it said.

Even before the announcement, the company had been moving in that direction, adding a second food-preparation line to some of its restaurants that only served a digital and delivery customer. At times during virus outbreaks, Chipotle temporarily shut its in-person dining and only served digital customers from specific locations, Brian Niccol, Chipotle’s chief executive officer, said during an interview with Bloomberg News in October.

“For Chipotle we’re definitely looking at all different forms of assets,” Niccol said in that interview. “If you can cut opening costs in half because now you need a lot less of a footprint and you can still do a million dollars of sales through your digital business, it opens the door to do now a digital-only restaurant, which in the past, we haven’t had that kind of scale.”

Chipotle shares climbed 1.2% at 9:34 a.m. in New York. The stock rose 48% this year through Tuesday, about five times as much as the S&P 500 Index.

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