After years of patiently waiting in the sidelines, it seems the wait is finally over for Chipotle. The Mexican-inspired fast casual chain has slowly but steadily been gearing up to take advantage of the ever-growing popularity of the lunchtime burrito, and it’s safe to say its patience has paid off.
Despite debuting on Charing Cross Road in 2010 and leaving a two-year gap between openings since, Chipotle has opened five UK restaurants in 18 months, kicking off a growth strategy that’s been a long time in the making.
“The idea was to plant a flag in the UK and go from there,” Tabassum Zalotrawala, chief development officer, tells MCA. “Since then, we’ve grown methodically and strategically, albeit slow.
But that’s changed – we’ve made so much progress recently.”
With a UK estate of 12 and its first opening outside London, in Watford, this year, Zalotrawala is certain the building blocks are in place.
“We’re not taking any piece of real estate that comes our way. We’re getting the right spaces, the right amount of spaces, and we’ve also implemented operational efficiencies so we’ve got the right economies of scale.”
The brand is known for its resolute refusal to turn to franchising. All restaurants are company-owned – whether in the UK, France, or Canada – and will continue to remain so, she says.
“We’ve done such an incredible job of opening in three international markets on our own. With the standards we have and the infrastructure we’ve built to support these international markets, there’s no rush to grow to 10,000 international units as some brands might have.
“We will do that, but in due course, in a manner that’s effective for us.”
In its recently reported Q2 results, Chipotle’s total revenue increased by 17% to $2.2bn, with like-for-like sales up by 10.1%. Zalotrawala reports performance is improving day by day.
She attributes this to three factors: an entirely company-owned operation, the quality of food, and an unwavering confidence in the investments Chipotle has made in the UK.
“We don’t rely on franchisees and partners. We’ve got a pretty healthy balance sheet. And we’re bullish about the investments we’ve made in people, infrastructure, and particularly operations,” she says.
“The experience we can provide is far above our competitors.”
Indeed, the menu has stayed the same across the pond. Portion sizes are smaller to cater to European tastes and so are restaurant sizes, which have been at the mercy of space availability in London. While back-of-house operations have been scaled to ensure efficiency, little else changed while bringing Chipotle to the UK market.
Restaurants continue to offer substantial dining space – similar to US counterparts – and are complemented by the adaptable nature of the food, which holds up well to delivery.
“The beauty of the food is that it’s very adaptable,” Zalotrawala says. “People are looking for Chipotle in its true form, just how it is in the US.
“We’ve done a nice job of working with our supply chain partners to ensure the same quality of poultry and beef.”
As growth plans kick off, the strategy will involve increasing its presence within London as well as its satellite areas. Following its first step outside the capital in Watford and an exceptionally strong performance at the newly opened Canary Wharf site, Chipotle will target mixed-use areas as well as high street locations with high visibility, foot traffic, and proximity to transport hubs.
University towns will be a key part of the long-term strategy, but the brand still has a lot of work to do around London.
“We’re strategically placing restaurants in areas with both daytime and residential populations, and also close to convenience channels,” explains Zalotrawala. “We’re looking into areas like Windsor and Uxbridge.
“We have a lot of wood to chop in creating brand awareness around London. University towns will be a big play for us, but it’s not in the immediate three-year strategy.
The rate of expansion will “hopefully be more than five sites in 18 months,” she says,
“It’s not a scattered approach of throwing sites around – we’re going to grow systematically rather than opening 20-30 sites a year.”
New sites will also be designed to cater for delivery, with designated windows for click-and-collect and delivery pickup. Chipotle also plans to expand into the drive-thru format.
“That access channel has rocked Chipotle’s world in terms of providing incremental sales and better margins, and giving people more access and convenience than they’re used to,” she adds.
The brand is also in the final stages of digitalising the offer by getting its app ready for the UK. For Zalotrawala, the combination of convenience, rising brand awareness, and great food is a clear winner.
“Our food is simple, but we do simple really well.”
