- Chipotle expects 300+ new locations in both 2024 and 2025, approaching pre-pandemic growth rates with an annual increase of nearly 8%.
- Q3 revenue rose by 13% to $2.8B, with net income up 24%, buoyed by a 6% same-store sales increase.
- The chain aims to reach 7K locations by the end of the decade, nearly doubling its current count of about 3.6K.
According to CoStar, despite a challenging year for the U.S. restaurant industry marked by rising costs, closures, and even bankruptcies, Chipotle (CMG) is ready to expand.
By The Numbers
The fast-casual chain opened 86 new restaurants in Q3 and plans to surpass 300 new openings by the end of the year. This would be a company record, with a similar target set for 2025.
Chipotle’s interim CEO, Scott Boatwright, expressed confidence in the company’s development team and pipeline during the company’s Q3 earnings call.
The fast food chain’s growth plans reflect an improving post-pandemic development climate, with easing inflation and supply chain recovery helping to stabilize costs. As of Q3, Chipotle had opened 185 new restaurants, outpacing the 149 opened by the same time in 2023.
Reaping Fruits
Chipotle reported a 13% increase in Q3 revenue, reaching $2.8B, while net income grew 24% to $387.4M. The company’s same-store sales rose by 6% over the previous year, a strong showing compared to other chains that are heavily discounting to sustain customer traffic.
Chipotle’s strategic focus on operational efficiency and maintaining full-price sales have helped it weather industry-wide challenges.
Unlike other chains, which are relying on discounts to attract customers, Chipotle has also maintained its sales with minimal promotions, reinforcing its strong market position and brand loyalty.
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Expansion Goals
The chain’s expansion includes growth in new international markets, such as the Middle East, where it recently opened its first location in Dubai, and in Canada, where it reached 50 locations with a new restaurant in Edmonton, Alberta.
With most of its locations in North America and Europe being company-owned, Chipotle’s model enables it to maintain brand consistency and operational control.
Chipotle aims to reach 7K locations by the end of the decade, nearly doubling its current footprint of about 3.6K locations. While the chain’s pre-pandemic growth target was 10% annually, it is now projected to reach 8% growth in 2024 and 2025.
Fast-Casual Outlook
Despite industry challenges, Technomic projects that the fast-casual sector will grow at a rate of 6.4% in 2024, compared to 4.6% for fast food and 3.8% for overall restaurant sales. transition would represent a return to growth mode for REITs that previously held back on new acquisitions due to pricing uncertainties.
