More than a year after food safety concerns plunged the fast-casual chain into crisis, Chipotle Mexican Grill still has a ways to go if it hopes same-store sales to return to “normal” levels. Despite increasing its marketing and promotions, Chipotle reported a 4.8 percent drop in same-store sales in the most recent fourth quarter.
To woo new and bring back lapsed customers, the chain plans a revised marketing strategy that focuses more on advertising and less on promotional offers. By planning its advertising according to a year-round schedule, instead of just pulsing spending on spring and fall commercials, as well as by launching a new scripted television series for children, Chipotle hopes to rebuild its damaged brand.
The chain will kick off its largest advertising campaign in its history in April, focused primarily on the taste and ingredients of its menu offerings. It plans to allocate 3 percent of any sales it earns on marketing and promotions going forward.
However, its recent free entrée and buy-one-get-one promotions failed to translate into success, leading Chipotle to determine that heavy spending on promotions will not be a key part of its ongoing strategy to drive customers into stores. Instead the company will expand its efforts to television, through a mix of commercials and a new scripted television series for children (building off of the past success of the company’s four-part webisode series, “Farmed and Dangerous”).
Finally, Chipotle indicates that it will increase the number of fundraisers that it supports each year. According to company data, 40 percent of participants in fundraisers had not eaten at Chipotle in the previous six months, but after such events, 20 percent of them return for a second visit within a month’s time.
Although a new dessert item is in the works, the company is committed to retooling the other areas of its business first, before it expands on its purposefully simplified menu. The company hopes to save money by revisiting its complex job interviewing process and replacing napkin dispensers that reportedly caused millions of dollars in waste. With improved digital ordering processes and catering capabilities, Chipotle promises to offer an attractive fast food option again, to both new and lapsed customers with whom it hopes to rebuild brand affinity.
- What challenges does Chipotle face as it struggles to rebuild faith in its brand?
- What are the benefits and drawbacks of promotional campaigns?
Source: Jessica Wohl, “Chipotle’s Marketing Menu for 2017: Biggest Campaign Ever, Fewer Promos,” Advertising Age, January 10, 2017