Analysts Say Chipotle’s Customers Are Suffering From “Menu Fatigue”

If you’ve ever been to Chipotle before, you know exactly what you can expect: burritos/burrito bowls, tacos, fajitas, and salads that can be made from a combination of toppings and fillings. Those ingredients have remained basically unchanged over the years (besides the addition of tofu sofritas in 2014). But while that familiarity might be comforting, Chipotle’s lack of new offerings is causing “menu fatigue” in some customers that could make it harder for the chain to come back after its recent food safety issues.

That menu worked great for Chipotle in the past, analysts from Deutsche Bank wrote Tuesday, via Business Insider. But analysts Karen Short and Brett Levy write that Chipotle might not be keeping up with the competition.

“We believe [Chipotle’s] success made them a bit complacent (although not with its desire to expand its store base or improve in-store operations) as the company’s lack of interest in innovation over the last decade has resulted in what we consider to be menu fatigue,” the anaylsts wrote in a note Tuesday, downgrading Chipotle’s stock rating from “Sell” to “Hold.”

Chipotle has left its menu mostly the same on purpose, keeping the ingredients simple but at the same time, providing enough options for customer to customize their order. That’s not enough anymore, analysts say, as other chains offer customizable food with fresh ingredients. Chipotle’s got some work to do to figure out what customers want these days, the analysts say.

“The company dramatically trails its peers in the world of data analytics,” the analysts write. “Without the high levels of insight many of its competitors already have, we question how easily, how effectively or at what cost [Chipotle] will be able to locate and recapture its lost customers.”

In case you’ve been living under a rock for the past few months, Chipotle’s recent foodborne illness issues — a six-state e.coli contamination that sickened more than 50 people and a norvirus outbreak that left more than 150 customers ill in Boston — has caused problems for the fast casual restaurant in terms of slumping sales and dropping stock prices.

Chipotle’s customers have ‘menu fatigue,’ and it’s a huge crisis for the company [Business Insider]

by Mary Beth Quirk via Consumerist