Dive Brief:
- Chipotle is building a “guest-obsessed” culture, with an emphasis on better hospitality, to help it navigate the macroeconomic uncertainty that is reducing customer visit frequency, according to CEO Scott Boatwright on a Wednesday Q1 2025 earnings call.
- Chipotle is already performing well on food quality and speed of service, according to Boatwright. However, an impact analysis uncovered “material deficiencies” regarding cleanliness, friendliness and how restaurants follow up on customers’ problems.
- In response, the company gave employees new directions. “This includes a friendly smile at tortilla, a heartfelt thank you from our cashier, clean dining rooms and drink stations, and great guest on-site recovery for any issue,” Boatwright said during the call. “The fact is smiles down the line don't slow us down.”
Dive Insight:
Chipotle is aiming to upgrade its in-restaurant hospitality as a way to prove its value to consumers who are pulling back on spending — without reducing its prices.
Revenue rose 6.4% year over year in the first quarter of 2025, reaching $2.9 billion, according to a Chipotle earnings report released Wednesday. However, same-restaurant sales fell 0.4% during the same period, as transactions fell 2.3% from consumers cutting back on dining out.
Poor weather and a slowdown in consumer spending contributed to the decline, but Chipotle plans on keeping its prices consistent despite the challenge, according to Boatwright. Instead, the restaurant will improve its value proposition by focusing on what he called Chipotle’s benefits.
“We're going to lean into high-quality, great culinary abundant portioning throughout all restaurant occasions and all channels and then lead into the customer experience in a more meaningful way, which I talked about in the prepared remarks,” Boatwright said.
The focus on customer obsession is already paying off, according to Boatwright. Refunds are on the decline as a percentage of sales, and customer care costs are down.
Hospitality improvements will build on other operational changes designed to keep restaurant operations fast and efficient, he said.
The company will roll out several pieces of equipment designed to simplify order fulfillment to 100 restaurants in the coming months, with the goal of expanding their use to all locations within the next several years, according to Boatwright. The equipment is expected to improve the bottom line and dining experience at the same time.
“While we do anticipate that we will realize efficiencies from these initiatives, some of this will be invested back into our restaurants to enhance the experience for our teams and our guests,” Boatwright said. “This will enable our crews to be properly deployed during peaks, driving better throughput and a better guest experience.”
