Will happy hour deals bring Chipotle’s customers back?

Photo - Chipotle
Aug 11, 2016

The offer of free burritos hasn’t been enough to help Chipotle Mexican Grill win back customers run off by a series of food-borne health scares, so maybe free beer and margaritas will do the trick. The chain is offering half-price drinks and two-for-one specials at locations in eight states across the Midwest.

Chipotle patrons in Kansas and Ohio can take advantage of half-off deals between 4:00 and 8:00 p.m. Those in Illinois, Iowa, Kentucky, Missouri, Nebraska and Wisconsin can get the two-fer offer during the same hours. The promotion is not, however, an invitation for those wishing to obtain a discounted drunk — it includes a limit of one offer per customer per day.

According to reports, Chipotle seems to be low-keying the offer. The chain has posted no in-store signs or advertising blaring out the deal. Some of its restaurants in the Midwest have the promotion in place while others are apparently unaware of it.

Chipotle has recently gotten some more bad press. The chain has lost two lawsuits by female employees who claimed they were fired because they were pregnant.

DISCUSSION QUESTIONS: Do you think Chipotle can be fixed at this point? What will it take to put the retailer and brand back on a growth track again?

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"There is no quick fix for a restaurant chain when you have had food safety issues."

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8 Comments on "Will happy hour deals bring Chipotle’s customers back?"

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Steve Montgomery

As Chipotle has discovered, there is no quick fix for a restaurant chain when you have had food safety issues. Earning back consumers’ trust requires some forgetfulness and forgiving by customers. I believe this is even harder for Chipotle as it positioned itself as being a place where you could trust the food because it was made fresh, locally sourced and all the other latest foodservice industry buzz words.

Will it ever be able to get back on the fast track? Time will tell, but it appears that inducing trial (or retrial) with free food didn’t work so now they have turned to alcohol to see if reduced cost or free booze will make people forgive and forget.

Max Goldberg

I think Chipotle can be fixed, but a return to success is not going to happen overnight. The chain has been badly wounded by a series of missteps, from tainted food to horrible personnel decisions. Management needs to come clean with consumers, apologize, announce how they have fixed the problems and invite consumers to come back. They might need to run a number of promotional offers to make wary consumers give the chain another try. And if they are going to make an offer, make it big and make it public. Then show the press and consumers how they are making good on their promises.

Gene Detroyer

One more incident probably kills Chipotle, but short of that they will be back on track. While they struggle right now, their concept matches the times. It is a matter of attaining that tipping point when confidence returns. When that happens, and it will, they are home free, unless they mess up again.

Brad Marg

Chipotle can be fixed, but it will most likely never return to its glory days of supremacy over other QSR restaurants. A brand built on quality ingredients will have a much harder time recovering from a food scare than one built on price and discounts like fast food. Their target demographic has a lot of options, and now an excuse to try other restaurants focused on quality and not price.

Chipotle must reset by growing their current customers and asking them to refer friends back to the brand. This can be done by implementing a permanent loyalty program that personalizes offers and promotes incentives for customer referrals. A great way to build trust, or regain it, is by leveraging customers who are already loyal to you.

Zel Bianco

Happy hour deals and their new rewards programs may help Chipotle get some of their customers back, and it also gives them the opportunity to reach new customers. As far as their branding goes, this is another step in the right direction. However, I think it’s going to take time and a clean health record to bring back the majority of their customers.

Craig Sundstrom

This seems ironic, since Chipotle has some of the most rigorous (or inane, depending on your viewpoint) age-check policies I’ve ever encountered — pleasing, no doubt, to the neo-Prohibitionist crowd, but maddening to others like me who are not flattered at the suggestion we might be 30+ years younger than we are.

But back on topic: whether/not it had had food safety issues, Chipotle was likely past the “growth track” phase — at least the rapid growth phase — anyway, having reached saturation in some markets. The public’s tastebuds have moved on to the next food fad. So the real question is: what does a health future look like, and how to reach it?

I’ve no silver bullet, but — in addition to the obvious sanitation issues — Chipotle needs to remind people of why they were attracted in the first place. I don’t think these gimmicky promotions are the answer.

Sterling Hawkins

With sales down ~20% and their first-ever quarterly loss earlier this year, the chain seems to be throwing quite a bit up against the wall to see what will stick. It’s certainly not beyond repair, though. Chipotle is/was on the right track in creating the Chiptopia loyalty program. If I was them, I’d double down on an improved loyalty program, getting employees energized around it, and making the communications and offers more personal to individual consumers.

Ken Morris
Ken Morris
Managing Partner Cambridge Retail Advisors
6 years 9 months ago
Chipotle is not doomed. Other restaurant brands (think Taco Bell and Jack in the Box) have been tarnished by food-borne illness outbreaks, and they have recovered. Part of the recovery process is time — it takes some time for consumers to forget and remember you for something else. While free food and discounted drinks won’t erase the memory of the illness outbreaks, it will get more people back in the restaurant. The more times they can get consumers to revisit the restaurant, and hopefully with a pleasant experience, it will help them forget the “issue” and increase the chance that Chipotle is more top of mind when they are deciding on where to eat for Mexican food. Another approach for Chipotle would be to introduce an exciting new menu item that intrigues customers. Taco Bell and Jack in the Box have been very creative in this area, as they are always inventing a new twist on the taco or burger that entices consumers to try the item. While Chipotle is/was known for good food and… Read more »
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