Chipotle branching out, plans to open burger restaurant
NEW YORK -- Chipotle, still struggling to win back customers after a series of food scares, plans to open its first burger restaurant this year.
The chain known for burritos said Thursday it will open a Tasty Made location this fall in Lancaster, Ohio, which is southeast of Columbus. The menu will be limited to burgers, fries and milkshakes, it said.
Chipotle Mexican Grill Inc. already has its hands full trying to recover from the E. coli outbreak and norovirus cases that sent sales plunging starting last fall. It has been giving away coupons for free burritos and stepping up marketing to win back customers, but sales were still down 24 percent at established locations in the second quarter.
There's also already been a proliferation of new restaurants promising higher-quality burgers, such as Shake Shack and Five Guys.
Chipotle declined to provide additional details on Tasty Made's food. Co-CEO Steve Ells said early fast-food burger chains had "focused menus," and Chipotle wanted create a restaurant around that model. The remark may have been aimed at McDonald's, which has seen its menu mushroom over the years.
Before its recent setback, Chipotle had found enormous success in positioning itself as an alternative to traditional fast-food chains. That spawned numerous other "fast-casual" concepts that tout better ingredients, or a format where people can walk down a line and pick the ingredients that go into their order.
Chipotle already has an Asian food concept called ShopHouse, which lists 15 locations, and a pizza concept called Pizzeria Locale, which lists five locations.
The company had signaled its intent to move into hamburgers, filing a trademark application for "Better Burger" earlier this year and noting its belief that the "Chipotle model" could be applied to a variety of foods. An address linked with Chipotle was on a trademark application for "TastyMade," the website Eater reported earlier this month.
Given its recent struggles, Chipotle said last week that it was assessing its plans for future restaurant openings with "a more conservative lens." For this year, the company has said it plans to open between 220 and 235 Chipotle restaurants, on top of the more than 2,000 existing locations.
If Chipotle's burger concept were to expand, it would pose a bigger threat to McDonald's Corp., which previously owned a stake in the Denver-based company. McDonald's has been rolling out a "Create Your Taste" program in select restaurants that lets customers build their own burgers, but has not said how widely it plans to expand that option.
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