Chipotle Mexican Grill reported on October 28 that digital sales were 38.8% of food and beverage revenue in the third quarter, up from 36.7% a year earlier.
According to Chipotle’s earnings release, comparable restaurant sales rose 2.1%, made up of a 1.3% rise in average check and a 0.8% rise in transactions, the third straight quarter of positive transaction growth. Total revenue rose 9.6% to $3.3 billion. The company opened 84 company-owned restaurants, 53 of them with a Chipotlane, and expects around 80% of new company-owned restaurants this year to have one.
What it means for operators
In our reading, digital share rose 2.1 points while total transactions rose 0.8%, so channel mix moved faster than traffic grew. Nearly two of every five dollars now pass through the ordering stack, which makes online ordering, handoff and kitchen routing core to the P&L rather than add-ons.
The labor line is the part for operations leads. Chipotle reported labor costs of 25.7% of revenue, up from 25.2%, and attributed the rise to lower sales volumes, higher employee compensation, extra restaurant labor supporting promotions and higher insurance costs. Operating margin fell to 13.7% from 15.9%, and restaurant level operating margin to 23.3% from 24.5%. A higher digital share did not hold the labor ratio down this quarter, so buyers of ordering and scheduling tools should ask vendors for labor hours per order in digital and in-store channels before assuming mix shifts save labor.
For how other vendors are packaging digital channels, see our coverage of Olo’s commission-free app for restaurant chains and Lightspeed’s scan to pay and Reserve with Google.
