Focus on Customer Experience a Recipe for Success for Chipotle

Based on the financial results of Chipotle’s third quarter that ended Sept. 30, the Mexican-food chain’s ongoing commitment to create valuable customer experience is a winner.

Highlights from Chipotle’s third quarter include a revenue increase of 31.1%, to $1.08 billion. In addition, comparable restaurant sales increased 19.8%, and the chain’s net income increased nearly 57%, to $130.8 million. Chipotle also opened 43 new restaurants in the third quarter, for a total of 132 this year.

“We are extremely pleased with our performance for the third quarter and throughout the year,” Steve Ells, founder, chairman and co-CEO of Chipotle, said in a release. “Our relentless focus is on our vision to change the way people think about and eat fast food results in better quality food, a compelling dining experience for our customers, and superior business results for our shareholders.”

Ells said that Chipotle is changing the way people think about fast food because they offer a “food culture” that focuses on sustainability, great taste, and preparation using classic cooking techniques.

“We believe these trends will continue, and that’s good for our customers and our shareholders,” Ells added.

Here are Chipotle’s “Four Pillars of Great Throughput”:

Expediters: The extra person between the one who rolls your burrito and the one who rings up your order.

Linebackers: The employees who patrol the countertops, serving-ware, and bins of food, so the ones who are actually serving customers never turn their backs on them.

Mise en place: What in a regular restaurant means setting out ingredients and utensils ready for use means, in Chipotle’s case, zero tolerance for not having absolutely everything in place ahead of lunch and dinner rush hours.

“Aces in their places”: A commitment to having what each branch considers its top servers in the most important positions at peak times, so there are no trainees working at burrito rush hour.

2014 Recap: An Impressive Nine Months for Chipotle

Revenue for the first nine months of 2014 was $3.04 billion, up 28.2% from the prior year period. The growth in revenue was the result of a 17.0% increase in comparable restaurant sales and from new restaurants not in the comparable base. Comparable restaurant sales growth was primarily driven by increased traffic and to a lesser extent from an increase in our average check.

During the first nine months of the year, Chipotle opened 132 new restaurants.

Restaurant level operating margin was 27.4% for the first nine months, an increase of 50 basis points from the prior year period. The increase was primarily driven by favorable sales leverage, partially offset by higher food costs, primarily beef, avocados, and dairy.

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