Original Article

Dive Brief:

  • Chipotle opened 271 restaurants in 2023, 238 of which included a Chipotlane, the company said Tuesday in an earnings release. 
  • The chain had the highest number of restaurant openings in its history for one quarter, with 121 new units in Q4, and in a single year, CEO Brian Niccol said Tuesday during the company’s earnings call. 
  • Chipotle said it has 811 units that feature Chipotlanes, including conversions of its existing restaurants. With an expectation to open between 285 to 315 new restaurants this year — over 80% of which will include Chipotlanes — it could surpass 1,000 Chipotlanes in 2024.

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Dive Insight:

Chipotle reported 3,437 total units for the year, nearly halfway to its goal of having 7,000 restaurants in North America. With its projection that about 80% of its new stores will include Chipotlanes, the company will likely open a minimum of 228 Chipotlanes to a maximum of 252 units.

Chipotlanes typically have about 15% higher sales than a traditional Chipotle restaurant, and the current average unit volume is over $3 million. Even though Chipoltanes represent about a quarter of the chain’s system, they have hundreds of basis points of higher margins, Niccol said.

“[We] continue to see very strong results with Chipotlanes driving higher new restaurant productivity, margins, and returns,” Niccol said. 

The company expects to reach 8% to 10% unit growth by 2025, even with ongoing construction problems.

“We continue to see developers delaying projects due to macro pressures and high interest rates, along with permitting, inspection, and utility installation delays,” Jack Hartung, Chipotle’s CFO, said during the call. “The midpoint of our guidance range assumes these challenges persist.”

Hartung said instead of building taking about 15 to 16 months, it is taking more like 21 to 22 months, but management has built up a strong inventory allowing for more flexibility. 

“If we get any break in terms of timelines with developers moving a little bit faster with local authorities in terms of utilities, in terms of permitting, if that was a little bit faster, we actually can get to that clip even a little sooner,” Hartung said. “But we built in the exact same extended timeline that we’re seeing today with the current very robust inventory. And that will get us, if not all the way, very close to that 10% figure.”