- Chipotle says it has worked to ensure “consistent and generous portions” after customer complaints.
- The move and unusual fluctuations in avocado prices have hit the chain’s profitability, he said.
- Execs said the brand’s focus on offering value had a positive response.
It’s been a big year for a modest mound — at least at Chipotle.
The chain’s profit margins suffered last quarter due to a concerted effort to provide “consistent and generous portions” in every order, the company said Tuesday.
The issue was first highlighted when disgruntled customers — protesting what they saw as skimpy or inconsistent portion sizes at the restaurant chain — took to social media this summer to complain about their protein scoops. and try to maximize your food.
Investors noticed, with one analyst it goes so far as to order 75 chicken and rice bowls of eight New York City Chipotle locations and found that the total weight of each varied greatly.
All the research prompted the burrito and bowl chain to jump on the initiative ensure everyone gets a consistent meal every visit.
“We know that portioning is our core asset in the organization,” Chipotle’s interim CEO Scott Boatwright said during Tuesday’s earnings call. “We are committed to making sure we give the right portion to every guest who enters the building.”
While that’s good news for diners at Chipotle, the chain said it was partly the reason for the hit to profitability in the last fiscal quarter.
“The benefit of last year’s menu price increases was more than offset by inflation on several items, notably avocado and dairy, as well as higher consumption as we focused on delivering consistent and generous portions,” said CFO Adam Rymer.
Rymer said the unusual price trend for avocados — which he said had “unusually low” prices last year — and the “investment” share combined to create more than a 1 percentage point drag on earnings.
But it appears to be money well spent, as Boatwright highlighted a significant improvement in internally tracked customer satisfaction metrics compared to the spring.
“We know we’re bringing value to the consumer, especially in this really tight environment,” he said, “and we’re going to continue to lean into that.”