Dive Brief:
- Chipotle’s same-store sales slid 0.4% in Q1 2025, according to the brand’s earnings statement ending March 31, a potential warning sign for the restaurant industry that could indicate a broader slowdown in consumer spending.
- The same store sales decline comes as Chipotle reports a 2.3% drop in comparable transactions. Consumers slowed down spending starting in February, according to the company’s internal research, CEO Scott Boatwright said on the chain’s earnings call.
- Economic uncertainty caused by the Trump administration’s cuts to federal spending, including potentially illegal firings of federal workers, and mercurial national trade policy seems to be freezing consumer spending. Chipotle’s same-store sales decrease is worrying considering the brand was a sales growth leader in the already challenging environment throughout 2024.
Dive Insight:
In early February, Chipotle was forecasting its comparable restaurant sales growth for 2025 would be in the low to mid-single digit range. The brand still predicts comparable sales growth for the year, according to its earnings release, and that metric could increase later in 2025 as year-over-year comparisons change.
However, CFO Adam Rymer said that if there were no positive changes in the macroeconomy, such projections could be optimistic. The negative impact of uncertainty on consumer traffic has continued through April, Boatwright said.
“The trendline that we're on now probably gets you closer to that 0% to 1% [same-store sales growth] range,” Rymer said. “We believe that we can build upon that. How much? It really depends.”
While there were exacerbating factors, like the weather, macroeconomic problems were the primary causes of the drawback, executives said.
“The underlying trend here is the consumer sitting on the sidelines,” Boatwright said.
Still, Boatwright said, the brand has a strong value proposition compared to competitors.
“The average cost of our most popular entree, a chicken bowl or burrito, is still under $10, which is about 20% to 30% below comparable fast casual meals and can reach as high as 50% below comparable meals in some markets,” Boatwright said. Chipotle's prices could help preserve traffic if consumers trade down from other brands and segments, rather than pulling back on restaurant visits altogether.
To support its value proposition, Chipotle is making continued investments in equipment meant to increase productivity. Boatwright said the chain is on track to install produce slicers in all restaurants this summer, which will ensure consistent portions of onions, bell peppers and jalapeños in addition to speeding up prep.
The brand has also developed an equipment package that incorporates a dual-sided plancha to speed protein cook times, a three-pan rice cooker and a high-capacity fryer. This package will be included in new builds starting in Q4 of 2025, Boatwright said, and will eventually reach other stores.
“We are now in the process of rolling out the equipment package to an additional 100 existing restaurants over the next few months,” Boatwright said. “Based on the results, we can accelerate the rollout to all restaurants, which we believe we can complete over the next several years.”
Chipotle’s current sales slippage is not likely a warning about the longterm health of the brand, Sharon Zackfia, a William Blair Analyst, said in a research note emailed to Restaurant Dive .
“Nothing in the past few months alters our view that Chipotle can ultimately be a much larger brand with thousands of incremental units generating stellar returns,” Zackfia wrote.
