Chipotle Mexican Grill (BYSE:CMG) secured the first place in Consumer Reports- secret of this success?


After Subway and McDonald’s (NYSE:MCD), it is Chipotle Mexican Grill (BYSE:CMG) that has got the most incredible success and growth story. Where other fast food restaurants are facing stagnant business, the sales in the Chipotle stores are rising.

Let’s have a look at the strategies that the management of Chipotle Mexican Grill (BYSE:CMG) has employed in order to better understand its business success.

The company’s growth rates are just exceptional, considering the fact that it is not a very big chain. The sales for the third fiscal quarter spiked up by 31.1 percent and reached to $1.08 billion. The same store sales also rose by 19.8 percent.

Chipotle Mexican Grill’s (BYSE:CMG) performance improved significantly due to the price increases that it introduced last quarter. The management of the company expects its growth rate to fall in the mid single digits for the current quarter, as the company is facing a little slow down. But even then, Chipotle’s figures will be better than the numbers that its competitors are expected to post. One of its main competitors, McDonalds (NYSE:MCD), expects the sales figures to drop by 0.5 percent globally.

The chief executive officer and chairman of Chipotle Mexican Grill (NYSE:CMG), Steve Ells, in a recent meeting with media, announced that the secret of company’s success is not a big one.  Elaborating on it, he further said that the management’s main aim is to provide the best possible services and food to its customers.

The CEO further said that the company’s performance throughout its history of being a publicly traded company has remained solid, even at the times of recession.  He said that he is often asked about the secret recipe of Chipotle Mexican Grill’s (BYSE:CMG) success. Steve mentioned that there is no mystery in Chipotle’s growth. The company just tries to deliver the best tasting food in town. The food is made using the traditional cooking techniques, and the ingredients used are also from the sustainable sources. Chipotle Mexican Grill (BYSE:CMG) makes sure that it has its best players in the kitchen so as to provide the most extraordinary food experience to its customers.
Steve further mentioned that companies these days, including McDonald’s, rely on the heavily processed ingredients to offer low-cost food. However, Chipotle’s experience shows that the customers are willing to pay some extra bucks for superior tasting food cooked from fresh ingredients. It is important to mention here that Consumer Reports ran a survey on some of the most popular food chains: around 32,000 customers took part in it. Chipotle Mexican Grill (BYSE:CMG) secured the first position when it came to consumer preferences, whereas, McDonald’s was at the very bottom of the list.

Coming to the stock prices of Chipotle Mexican Grill (BYSE:CMG), the company, on the last trading day of December 5, 2014, started its stocks at a price of $665.80 and closed at a price of $660.57. The company has a total market capitalization of $20.49 billion.