Competitors See Opportunity in Chipotle’s Troubles

The Chipotle food-safety saga has been impossible to ignore for the last few months, as everyone from hungry college students to Wall Street traders are forced to reckon with the chain’s downfall. For other fast-casual and fast food restaurants, however, the news is an opportunity to snatch some new guests. As we wrote earlier, Sweetgreen has already earned the moniker “the new Chipotle” to some, and they’ll undoubtedly benefit at least somewhat from the Mexican chain’s decrease in sales. Others are hoping that they can improve their image by highlighting food safety practices – and surreptitiously reminding everyone that they haven’t caused any norovirus outbreaks recently.

Canadian chain Freshii is twisting the knife by offering half-priced Mexican food while Chipotles everywhere are closed for an all-hands meeting and regroup. They claim that this is to “help consumers through these dark hours,” and that “the least [they] could do was look after their customers while Chipotle paused to recalibrate.”

White Castle, while not a direct competitor of Chipotle, has decided now would be a good time to launch a website devoted entirely to advertising their food safety practices. The website is unambiguously named http://www.WhiteCastleClean.com, and it showcases their commitment to “promoting food safety, cleanliness and transparency.”

Chipotle meanwhile is struggling to recover while their stocks are in free-fall. CEO Steve Ells has made repeated statements about their new food safety practices, and promised that they will release any information about the source of the outbreaks last year. This Super Bowl, they are offering $50 currency card and a limited-edition gift from the makers of Tabasco sauce to anyone who uses their catering service.

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Sweetgreen Expects a Full Half of Sales to Come from their App this Year

The fast-casual salad chain Sweetgreen had a big year this year, opening 3 new stores in New York alone, moving their headquarters to California, and being dubbed “the next Chipotle” by CNN and others. One could argue that their success is built on many things – timing, a growing demand for healthy, sustainably sourced foods, their youthful aesthetic (one of their limited edition salads last year was named in honor of a Kendrick Lamar song) – but it would be a mistake to underestimate the role mobile has had in that success.  So far, 21% of Sweetgreen’s sales come through their custom app, and they expect that number to jump as high as 50% this year.

The appeal of mobile ordering is understandable: with lunchtime lines out the door, the Sweetgreen app allows guests to order from the office and pick up immediately, and once downloaded, a rewards system makes it more likely for them to keep visiting. Additional features like the ability to flag dietary restrictions, add favorites, and integrate with the iOS health app, add an additional layer of appeal.

Of course, for many small chains it simply isn’t feasible to build out this kind of ordering system. Sweetgreen has had the benefit of $95 million in total investments in recent years, and they’ve clearly dedicated a fair amount of that to building their mobile presence. But they do serve as a reminder of the kind of return such an investment can have.

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