Chipotle is opening its first digital-only restaurant, the Chipotle Digital Kitchen.
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Rather than the typical fast-casual, burrito-building service line, the Digital Kitchen will consist of only a lobby designated for off-premise orders and food pick-up. However, the Chipotle experience will be far from gone, as all the sounds, smells and kitchen views of a traditional restaurant will be pampered throughout the reception area.
The new prototype, located in Highland Falls, N.Y., comes as Chipotle looks to spread locations into high dense, urban marketplaces without the costs of operating a full-scale restaurant. The virtual restaurant space will also help accelerate the digital business in non-traditional locations.
“The Digital Kitchen incorporates innovative features that will complement our rapidly growing digital business, while delivering a convenient and frictionless experience for our guests,” Chief Technology Officer of Chipotle Curt Garner said in a statement. “With digital sales tripling year-over-year last quarter, consumers are demanding more digital access than ever before so we’re constantly exploring new ways to enhance the experience for our guests.”
Chipotle’s digital sales grew 202.5% year-over-year, to $776.4 million, and represented 48.8% of sales last quarter, according to Chipotle’s Global Chief Development Officer Tabassum Zalotrawala. Delivery made up about half of those digital sales, which benefited from expanded partnerships. The remainder of sales came from order-ahead transactions.
"Fortunately, what we did prior to the pandemic was we invested heavily into the digital accessibility for our customers --whether it's the app, the website," Chipotle chairman and CEO Brian Niccol told Fox Business' Neil Cavuto. Off-premise orders especially took off when stay-at-home orders went into place and will "continue to be a key driver of our success and our ability to manage through the crisis."
The new digital-only concept will hinge on orders through the Chipotle website, app or third-party delivery partners. The Digital Kitchen will also accommodate large catering orders available for pick up in a separate lobby.
“We absolutely plan to open more digital kitchens and are carefully evaluating the best trade areas for Chipotle in which to expand this test,” Zalotrawala said in a statement to FOX Business. “Future locations will be areas where Chipotle has a higher volume of sales through digital business.”