Sorry, Chipotle Fans -- Keep Paying Extra for Guac
Image source: Chipotle.
Chiptopia came to an end over the weekend. The final day of the three-month loyalty rewards program at Chipotle Mexican Grill(NYSE: CMG)was Friday, but there will still be some freebies to dole out this month. Any free meals earned during Chiptopia can be claimed for 30 days after they're earned, something that the chain had warned could eat into the accounting between this year's third and fourth quarters.
Chiptopia isn't the only promotion that came to a close this past weekend. September found Chipotle in a giving mood. It offered high school and college students free fountain beverages with the purchase of any entree. There were also free kid meals on Sundays through September.
You don't have to be a guac-et scientist to figure out why Chipotle was trying so hard to woo patrons last month. It's all but a lock to wind up being Chipotle's fourth consecutive quarter of double-digit percentage declines when it comes to year-over-year comps. You can't blame the former fast-casual darling for trying. Between Chiptopia aiming at getting die-hard fans to come back more often, the free soft drinks attracting young diners, and the kid meals promo wooing families, you have a chain going all out to close a likely horrendous quarter on a positive traffic note.
Wake me up when October ends
Chipotle hinted that it would be coming up with a more permanent customer loyalty program after Chiptopia ran its course. It mentioned during its second-quarter earnings call -- after revealing that Chiptopia had garnered more than 3.6 million sign-ups during the first few weeks -- that a new program was in the works.
It's a surprise to see that Chipotle didn't hit us with the new program over the weekend, but a mysterious tweet on Sunday makes it seem as if something new may be unveiled come Thursday.
The post doesn't specifically state that a new program will be introduced in three days, but it's hard to suggest otherwise. Some initial responses to the tweet -- wondering if Chipotle was about to make guacamole free on Thursday -- were quickly refuted by Chipotle itself.
We'll find out soon enough. We're also now just three weeks away from knowing if Chipotle's aggressive promotions panned out. It reports fresh financials on Oct. 25. If it doesn't have a permanent loyalty program in place by then, you can be sure that it will come up during the subsequent earnings call. If "unexpected riches" are coming on Thursday, shareholders who have seen the stock get pounded since it peaked late last year will probably want to get in on that, too.
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Rick Munarriz has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Chipotle Mexican Grill. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.