Dive Brief:
- Chipotle will open its first Mexico location on Thursday in the northeastern state of Nuevo León in partnership with Alsea, a major restaurant operator, according to a Monday press release.
- The burrito brand will open more locations in the state throughout this year, before expanding to Mexico City, the largest city by population in North America, next year.
- Chipotle said it would work with Alsea to evaluate further opportunities for growth in Mexico, using data generated by its first location.
Dive Insight:
The market debut comes about 15 months after Chipotle announced plans to open locations in Mexico and is a potentially significant step forward for the brand’s international strategy.
Chipotle has a growing international presence, with a handful of stores in the United Arab Emirates, Qatar and Kuwait, according to the press release. The brand also has 80 stores in Canada, 20 in the United Kingdom, six in France, two in Germany and plans to open locations in Singapore and South Korea.
Chipotle and Alsea selected metro Monterrey within Nuevo León as the target for the first Mexico opening “due to its strong economy, growing population, and status as one of the country's leading business and innovation hubs,” according to the press release. The chain will use the Nuevo León to inform its future strategy in the county.
“Our initial focus is on opening one great restaurant and learning alongside our guests and our partners at Alsea,” Nate Lawton, Chipotle’s chief business development officer, said in a statement. “This first location will serve as an important proof-of-concept, giving us the opportunity to better understand local consumer preferences as we thoughtfully grow in Mexico.”
Alsea CEO Christian Gurría, said he was confident Mexican consumers would receive the Mexican-inspired brand warmly and that the country had significant growth potential for the brand.
In June, the chain’s CFO, Adam Rymer, told CFO Dive that Chipotle could one day have as many international units as it has domestic stores. At the end of Q1 the brand had roughly 4,000 units in the U.S., according to an earnings release.
In its core market, Chipotle has struggled somewhat to grow sales lately, with negative same-store sales in two of the last four quarters. In February, the chain announced a strategy to deal with these sales troubles, called the Recipe for Growth, hinging especially on menu innovation, global growth and renovations to its loyalty program. So far this year, Chipotle has tested crunchy chicken, a happy hour promotion, catering and tweaks to how it markets group ordering occasions.
