- Chipotle says it has tried to provide “consistent and generous portions” after customer complaints.
- The move and unusual fluctuations in avocado prices have hit the chain’s profitability, it said.
- Executives said the brand’s focus on offering value had a positive response.
It’s been a big year the humble ladle — at least at Chipotle.
The chain’s profit margins suffered last quarter due to a concerted effort to provide “consistent and generous portions” for each order, the company said Tuesday.
The problem was first highlighted when disgruntled customers complaining about what they perceived as low or inconsistent serving sizes at the restaurant chain took to social media this summer to complain about the protein in their portions. and try to maximize their meals.
Investors have noticed, for one analyst going so far as to order 75 chicken and rice bowls of eight Chipotle locations in New York City and found that the total weight at each varied significantly.
All the studies prompted the burrito and bowl chain to take the initiative provide everyone gets a consistent meal each visit.
“We know equity is our core equity in the organization,” Chipotle’s interim CEO Scott Boatwright said on Tuesday’s earnings call. “We are committed to ensuring that we assign the correct section to every guest that enters the building.”
While that’s good news for Chipotle diners, the chain said it was partly to blame for the drop in profitability in its latest fiscal quarter.
“Last year’s menu price benefit was more than offset by inflation in several items, particularly avocado and dairy, as well as higher consumption as we focused on providing consistent and generous portions,” said CFO Adam Reimer.
Reimer said the unusual price trend for avocados, which he said had “abnormally low” prices last year, and the “investment” division combined to create a gain of more than 1 percentage point.
It appears to be money well spent, however, as Boatwright highlighted a significant improvement in an internally tracked customer satisfaction measure compared to the spring.
“We know we’re delivering value for the consumer, especially in this really tight environment,” he said, “and we’re going to continue to lean toward that.”