During Chipotle’s third quarter earnings call Tuesday, interim chief executive officer Scott Boatwright ensured the company’s strategy will remain in place following his predecessor Brian Niccol’s surprising departure to Starbucks in August.
That said, Boatwright’s fingerprints will be plenty visible as the chain moves toward its near and long-term plans. The company is putting many pieces into place, for instance, to maximize efficiencies and drive throughput. No surprise, given Boatwright’s operational expertise (he joined Chipotle in 2017 as the chief operating officer after having served as vice president of operations at Arby’s for several years).
What is perhaps a bit more surprising is Boatwright’s bullishness on expanding the brand internationally. Chipotle has ramped up its global presence in recent years, including in Canada and Europe, but the footprint remains nominal – more than 40 locations in Canada, about 20 in the U.K., six in France, and two in Germany. That may soon change, however, as the company recently promoted Anat Davidzon to managing director of international after serving as managing director of Canada for about six years.
“(Davidzon’s) done an amazing job in (Canada) getting margins comparable to U.S. margins and we’re growing 25%-to-35% in that country today,” Boatwright said. “The reason we put Anat in Western Europe is to look for a similar outcome and she's already making incredible progress. We know we could have hundreds of restaurants in the markets in which we operate today and potentially thousands in Western Europe over time.”
Beyond Canada and Europe, Chipotle just entered a new country – Kuwait – for the first time in more than 10 years, in partnership with the Alshaya Group, the company’s first franchisee. Another just opened in Dubai and both locations are exceeding expectations. Boatwright said Chipotle has quickly become one of the top performing brands in Alshaya’s extensive portfolio that includes retail, pharmacy, optics, hotels, leisure and entertainment brands, and more.
“This is further strengthening our confidence that Chipotle’s responsibly sourced, classically cooked, real ingredients, resonates across geographies. We are targeting to open a second restaurant in Dubai early next year and plan to accelerate growth with Alshaya Group in 2025,” Boatwright said.
He added that Chipotle will look at other partners around the globe for potential partnerships, whether it’s in Latin America, the Asia-Pacific region, or elsewhere, and expects such opportunities to emerge in the coming months.
“We’ll look at those very closely on what market entry would look like for us,” Boatwright said.
In 2022, Chipotle increased its unit growth target to 7,000 stores, supported by an 8%-to-10% opening pace per year. But that target is centered on the company’s North American system and, as we learned from Boatwright this week, global expansion beyond North America is now becoming a bigger narrative.
“This brand has had extraordinary success here in North America. We have our sites clearly aligned on 7,000 restaurants, but I also want to give an eye towards how do we continue to push Chipotle to be more of an iconic global brand?” he said. “That's what you'll see probably in the coming years and coming months.”
Contact Alicia Kelso at [email protected]
