Meet the relative newcomer to the category. Chipotle. A fast-casual Mexican restaurant chain using authentic ingredients. It reported a 19.8% increase in comparable restaurant sales and revenue increases of 31% over the past quarter.
Meet the category leader. McDonald's. A fast food restaurant chain serving predominately hamburgers and sandwiches. Over the past quarter it saw a 3.3% worldwide drop in sales and a whopping 30% profit dive.
Given their relatively small market share, Chipotle and other fast-casual restaurants like them aren’t in any danger of toppling the fast food giant yet. But they are building momentum. Chipotle is leading the charge having outpaced other fast-casual restaurants in terms of growth and sales with stock rising nearly 47% over the last 12 months. Meanwhile McDonald's has shown they are aware of the conscious push from consumers and are considering a rethink of their products. Chief Executive Officer, Don Thompson said “You’ll see us in some categories looking to different products, possibly organics”. Hopefully this means McDonald's would consider more than just switching to organic milk (although that would be a great start).
Chipotle has proven it can elevate the fast food experience for consumers and have everyone loving it. Only time will tell if McDonald's will challenge itself to change its recipes and do the same.
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