Why Chipotle had unit growth in 3Q14

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Nov. 26 2019, Updated 9:32 p.m. ET

Growing units

At the end of 3Q14, Chipotle Mexican Grill (CMG) added 43 new units. This took the total number of restaurants to 1,724. More than 98% of Chipotle’s restaurants are in the U.S.—1,698 restaurants. CMG has seven restaurants in Canada. In Europe, the company has three restaurants in France. It also has one restaurant in Germany.

 CMG Number of Restaurants 2014-10-21

Other concepts

CMG operates eight ShopHouse Asian Kitchen restaurants and one Pizzeria Locale restaurant. These two new concepts use the same formula of preparing fresh food every day. The restaurants also use quality ingredients.

CMG is held by the Consumer Discretionary Select Sector SPDR Fund (XLY). XLY holds other restaurant stocks like Darden Restaurants (DRI).

McDonald’s (MCD) has more than 35,000 restaurants. Globally, it added 181 restaurants to its system in 3Q14. Domino’s (DPZ) has more than 10,800 restaurants. It added 160 units to its system during the third quarter.

Market location

Choosing locations for the restaurants is important. Usually, restaurants that open in the high street or a location of high interest do well. CMG identifies these markets as “proven markets.”

CMG will open 70% of the restaurants in the proven markets. The other 30% will be broken down into two parts—15% in will be in “developing or established markets” and 15% will be in “new markets.” The company opened restaurants in Greenfield, North Carolina and Corpus Christi, Texas.

Considering the growth in same-store sales and number of units, we’ll discuss their impact on revenues in the next part of this series.

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