Must-know: Why Chipotle Mexican Grill appeals to customers

Chipotle Mexican Grill’s appeal

With strong same-store sales, it’s important to understand why Chipotle Mexican Grill (CMG) attracts customers.

Must-know: Why Chipotle Mexican Grill appeals to customers

The above image displays a notice of using conventional beef when placing an online order on Chipotle Mexican Grill’s official website.

Customers buying the food culture

Chipotle Mexican Grill actively propagates its food culture of serving food with integrity—food made with the best quality ingredients. The company stresses that it doesn’t use meat from animals that were conventionally raised with antibiotics or added hormones. Grass-fed beef is a result of this ideology. But recently beef supply in the U.S. has faced shortages due to reasons found in the article “Important food cost issues facing the restaurant industry.”

To fill its shortages in high quality beef supply, the company temporarily opted for the conventional sources. Moving away from its food culture, the company made its customers aware of these changes by posting notices in the restaurants.

Quality food with an affordable price point

As of August 8, 2014, a steak burrito in New York costs $11.26 plus tax, which includes $2.3 for a guacamole topping, and a chicken burrito costs $10.57 plus tax, with the guacamole. But this is on the top end. Without the guacamole, the prices near around $8, which is similar to a combo meal at McDonald’s (MCD) or a similar restaurant, according to Numbeo.com. The average price range at a casual dining restaurant such as Olive Garden, under the umbrella of Darden Restaurants (DRI), is between $7 to $17. Read here for more details.

An investor interested in the restaurant industry as a whole can invest in ETFs such as the Consumer Discretionary Select Sector SPDR Fund (XLY) and the PowerShares Dynamic Food & Beverage ETF (PBJ).