Chipotle's Sales May Be Up but its Traffic is Still Slow



Chipotle's sales have slowly inched up by 4.4 percent in the third quarter compared to the same time period last year.

The fast casual chain's executives have said this is mostly due to the increase in the average check price. Chipotle's Chief Executive Officer Brian Niccol said that customers are responding well to the chain's new drive-thru test.

“It’s clear that customers appreciate the added convenience because these stores generate digital sales far above the national average,” said Niccol on an earnings conference call, who also said that the fast casual brand will be expanding the drive-up test to "several" more markets next year.

Niccol said while the company is also testing new menu items, it's mainly focused on enhancing its digital capabilities.

"I don't think new menu news is the primary unlock," said Niccol last Thursday. "I think it plays a role. But I think the digital access, removing friction ... is a big unlock for the Chipotle business."

Chipotle has also increased its menu pricing by 3.8 percent.

But even though sales may be up, the chain is still struggling to get those long lines of the past again. Transactions fell by 1.1 percent compared to the year earlier.

Chipotle is still recovering from major backlash for a number of food safety issues that created a media frenzy a few years ago. This paired with the competitive market has made it difficult for the brand to bounce back.

The fast casual isn't the only restaurant chain experiencing a slump in traffic though.

"McDonald’s Corp. reported earlier this week that guest counts declined again in its U.S. business, even as it managed to deliver a 2.4 percent increase in comparable sales from a year earlier. Starbucks Corp., too, has a traffic problem in its home market," writes "Bloomberg."

Read more about how Chipotle’s traffic is still down at “Bloomberg” now.

Last year, Foodable's Paul Barron explained some of the chain's missteps and also outlined how it can get reclaim its top spot in the fast casual sector. Watch the video below to see if the chain has implemented any of these tips.