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This week, Chipotle Mexican Grill’s stock experienced a notable decline amid concerns about economic challenges affecting its customer base. The restaurant chain highlighted that these pressures are particularly impacting younger patrons and those with lower incomes.
CEO Scott Boatwright explained that households earning under $100,000 are curbing their dining out habits, largely due to economic uncertainties and inflationary pressures.
Boatwright emphasized that customers aged 25 to 35 are particularly strained by factors such as unemployment, rising student loan payments, and stagnant wage growth that fails to keep up with inflation. He suggested that this trend is likely affecting the wider restaurant industry.
In response, Chipotle has adjusted its sales growth projections for a key performance metric this year.
During a recent earnings call, Boatwright noted that the company’s rewards programs could be an effective strategy to re-engage younger consumers and encourage their return to Chipotle’s outlets.
“We believe we have an opportunity to create more engaging experiences that drive consumers into the rewards funnel, increasing our active members and resulting in higher frequency and spend,” he said.