How Chipotle Mexican Grill, Inc. (CMG) Managed To Recover One Third of Lost Sales

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Chipotle Mexican Grill, Inc. (NYSE:CMG) has recovered part of its sales the company had lost due to a number of food safety lapses last year. The company indicated that it gave way approximately nine million burritos in an effort to win back its customers, who have left them following food safety mishaps denting its sales very badly last year. As part of its turnaround tactics, the food restaurant firm would be providing more free offers as one-third of sales were already recovered.

Food Coupons Thro Snail Mail

Chipotle Mexican Grill, Inc. (NYSE:CMG) indicated during an investment conference recently that it would send 21 million free food coupons through snail mail to the customers in the United States. The restaurant firm expects 25% of the coupons to be redeemed. On February 8, the company closed its stores for food safety and asked diners to text the request for a free burrito. The demand for the offer was more than double than the company estimated.

As many as 5.3 million requests were logged in. The executives told the meeting that the redemption rates on the text coupons were 67%. It would have spent over $62 million based on a cost of $7.10 burrito cost and distributed through mail and text coupons offering free entrees. Its CFO, Jack Hartung, admitted during an investor conference conducted by Bank of America Merrill Lynch that the free burritos were working out as it brings in people to the restaurant.

Costs Are Higher Than Estimated

Chipotle Mexican Grill, Inc. (NYSE:CMG) has issued a warning that it would be reporting a loss for the first time as a public firm as its costs to recover lost business was running higher than estimated. The two regions, Northeast, and the Pacific Northwest, were the most affected by the food poisoning outbreaks last year and were also the slowest to stage a recovery.

Chipotle Mexican Grill, Inc. (NYSE:CMG)’ Chief Creative and Development Officer, Mark Crumpacker, said that the future offers were aimed at increasing the visits would be delivered through the mobile devices. Also, free food offers were effective with its customers.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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