Weylu Chang
Liberty University
BUSI 530-B15
Dr. Abiloa Fapetu
Chipotle Mexican Grill is a restaurant chain serving tacos, burritos and salads. It
competes in the highly competitive restaurant industry, estimated at more than $225
billion market in the U.S. The restaurant market is extremely competitive and dominated
by the highly successful burger chains of McDonald’s, Burger King and Wendy’s.
Chipotle targets the fast, casual, fresh, healthy, made to order market. The market
trending towards the healthy food offerings has helped Chipotle gain tremendous growth.
Chipotle Mexican Grill has seen an increase in revenue, each year, since it was founded
in 2009. This is an incredible feat since restaurant giants McDonald’s and Burger King
are complaining of declining sales. Chipotle competes in the fast and casual market. The
fast casual market is the only restaurant market to see growth in the last five years. “The
look and feel of the so-called fast-casual restaurants and their focus on fresh ingredients
tends to attract a crowd of customers…” (Gasparro & Rubin, 2013). Even in a struggling
economy Chipotle has continued to grow. In 2013, “Chipotle plans to open 165 to 180
new restaurants” (Gasparro & Rubin, 2013). Chipotle has capitalized on a trending
market.
Chipotle continues to grow in revenue and in number of locations through a
consistent delivery of quality foods with efficient service. Chipotle plans to raise prices in
the near future, and with gas prices rising and slow job growth in the country, this could
mean a slow down or decline in revenue. This creates higher risk for investors. Still
Standard & Poor’s thinks, Chipotle will outperform the rest of the industry due to quality
of foods. S&P goes on to grade Chipotle with average volatility and a B+ grade in
earnings and dividend ranking. Chipotle is a strong brand, backed by a solid history of
growth and consistency. Chipotle is a strong company to have in one’s portfolio.
