Chipotle's New Restaurant Format Is a Huge Changeup From Its Roots

Due to the ever-changing market and the ongoing COVID-19 pandemic, Chipotle is shaking up its formula for some of its new restaurants. The fast-casual dining chain is focusing on digital orders and drive-thrus in order to streamline the food pick-up process and cut down on in-store eating. Chipotle will launch its first Chipotlane Digital Kitchen in Cuyahoga Falls, Ohio, later this month and this move could prove to be a gamechanger for the chain restaurant.

This Ohio location won't have indoor dining or in-person ordering, with customers only able to order through the Chipotle app or online. The restaurant will feature a drive-thru – the "Chipotlane" – and a walk-up window for pick up. While the dining room has been eliminated, there will be a small outdoor eating area should customers prefer to eat on the premises. Only 10% of Chipotle's 3,000 US locations have Chipotlanes, but those locations have seen "approximately 15 percent higher sales compared to non-Chipotlanes opened during the same period." 

Chipotle has added drive-thrus to 12 existing locations, and the company reports an uptick in sales since their addition. Due to the smaller footprint and streamlined services, these new-style restaurants can be more cost-effective in more expensive urban areas. Not only that but it will cut down on potential exposure to COVID-19 for employees due to the lack of indoor dining and face-to-face contact with customers.

This new development comes on the heels of a recent price hike for Chipotle's menu. In June, the company's Chief Financial Officer John Hartung confirmed that the menu cost increased by about 3.5% to 4% to cover the cost of raising its workers' wages. Confirming the price hike at the Baird Global Consumer, Technology & Services Conference, according to CNBC, Hartung explained that "it feels like the right thing, at the right time, and it feels like the industry is now going to have to either do something similar or play some kind of catch-up. Otherwise you'll just lose the staffing gain."