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November 1, 2022

When fast-food diners are grabbing a quick bite to eat, it’s a good reason for quick serve restaurants to try to figure out why they choose certain restaurants over others.

Given that most lunch breaks in the U.S. are between 30 minutes to an hour, it comes as no surprise, according to an Equals Collective study, that the number one reason people go to fast food restaurants over competitors is because they’re quick. 

Then what about the other reasons? The second reason people go to fast-food restaurants is simply because hungry people may not want to mess with cooking. It does take time to make a meal, so it’s no coincidence that the third reason is that it’s easy to get food when you are running late.  

The fourth reason most people choose fast-food, goes back to available time. When someone only has 30 minutes up to an hour for a work lunch or break, the fast-food makes it a quick turnaround to grab a bite and not be stressed about getting back to work late by dining in a sit-down restaurant. 

The fifth reason people may choose to dine at a fast-food restaurant is to satisfy cravings. It’s no secret some food is definitely craveable, probably one of the most craveable foods is McDonald’s french fries. One might think price was high on the list as fast food is usually cheaper than sitting down at a restaurant, which would lead people to wonder is price really king? 

Chipotle Feels the Sting of Inflation

Rising inflation is making more people consider what it really costs to go out to eat and that includes going out to eat at fast-food restaurants. While pricing soars, and income doesn’t keep up, it affects shopping habits. Chipotle Mexican Grill is no stranger to seeing trends in customers shopping habits. 

Jack Hartung, Chipotle’s chief financial officer, has stated that the restaurant chain had considered and even tested offering a lower priced menu item at $5 or below.

“Our customers said, ‘Great idea. Go ahead and do it,’” he said. “And then, when we tested it in restaurants, nobody bought it. Because everyone said, ‘Well, I love my chicken burrito.’”

When thinking about where to eat, more customers are choosing McDonald’s over Chipotle, and it has the restaurant wondering what to do to get them back.

“We had this exact discussion during the Great Recession, where we saw consumers start to reduce their dining experiences,” Hartung stated. “And with Chipotle, during that time, even though our comps held up better than every other restaurant company —we stayed positive throughout that entire time — our transactions were slightly negative. So, we did see some transactions actually dip.”

But “as the recession was starting to end, our transactions came roaring back, and we had double-digit comps from there. So, we’ve seen this before,” Hartung said.

“They come for customization, real culinary, and they crave the food,” he said. “Most customers get the exact same entrée every single time. And that’s what they crave,” Hartung said. 

When discounted menu items came up during third quarter earnings call on Oct. 25, Chipotle CEO Brian Niccol said, “we’re not going to be chasing with discounting in the traditional sense. We are going to use targeted CRM initiatives that we know get a great return and also play a meaningful role in the consumer that receives that message.”

More Inflation to Come

While consumers aren’t getting used to spending more money on everything, some people are still spending on the things that they want. While more people still want to enjoy the convenience of dining out, more customers are choosing fast-food like McDonald’s over casual sit-down restaurants to try to curb the overall ticket price. 

Consumers who ultimately make the decision to dine out, may choose on price and others will choose on craving. Chipotle isn’t planning to try and compete with the likes of McDonald’s for the lower income consumers. The restaurant chain will be using other means to boost its reach to customers, by using its loyalty program that has over 30 million users, to work to build up the lagging sales. Hartung also stated that as long as commodities “behave themselves,” Chipotle isn’t expecting a price increase on its menu at this time. 

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