Orange County’s two largest restaurant chains used different methods to post record unit growth for 2022.
The digital drive-thru concept for Newport Beach’s Chipotle Mexican Grill Inc. (NYSE: CMG), the Chipotlane, is quickly becoming the chain’s standard for new brick-and-mortar locations, while Irvine-based Taco Bell further tapped international markets to drive expansion.
Both fast-casual giants counted double-digit sales growth for the fourth quarter ended December, with Chipotle posting $2.2 billion in revenue and Taco Bell reporting system sales of $4.6 billion, up 11% and 14%, respectively.
Drive-Thru Takeover
Chipotle opened 100 stores in the fourth quarter, the first time it’s hit that mark in a quarter.
Of those recently added units, 90 included the chain’s Chipotlane option, which continues “to perform well and are helping enhance guest access and convenience, as well as increase new restaurant sales, margins and returns,” Chief Executive Brian Niccol said in a statement.
The Chipotlane is a convenience-based system that provides a pickup or drive-thru window exclusively for mobile orders. It was first introduced in 2018.
Digital business represents 39% of total sales for Chipotle, according to Niccol.
The 500th Chipotlane opened last November. Out of Chipotle’s 255 to 285 new restaurants planned for next year, 80% are expected to include the drive-thru.
Chipotle plans to have Chipotlanes take over the majority of its portfolio after reporting that those units continue to outperform the non-drive-thru counterparts.
Last year also brought the most store openings for the company in six years, Niccol said.
Chipotle had almost 3,200 restaurants as of last year and its current expansion goal is to reach 7,000.
Recent digital innovations also include last month’s rollout of advanced location-based technology on the mobile app and developing its first automated meal assembly line with the Hyphen program to test this year.
The Mexican-cuisine restaurant chain this month launched a new concept dubbed Farmesa with a menu that features bowls of protein, greens and grain. Its first location will be in the Kitchen United Mix food hall in Santa Monica.
Chipotle’s stock is up nearly 4% over the past year, and its market cap of $45 billion is approaching that of Irvine’s Edwards Lifesciences Corp. (NYSE: EW), OC’s most valuable public company with a $47 billion valuation as of last week.
Tacos Overseas
Taco Bell International opened its 100th restaurant in Spain last February approaching a total of 1,000 restaurants abroad, which set the pace for the rest of 2022.
While the U.S. division added 250 new restaurants total, the international segment ended the year with 246 new locations beating its previous record and ultimately reaching that 1,000-unit goal.
The international business reported an increase of 23% in total system sales for the fourth quarter, and same-store sales among its largest markets like India and Spain increased by double-digits as well.
Taco Bell counted over 8,200 locations as of 2022, which makes it the third-largest subsidiary under Louisville, Ky.-based parent company Yum Brands Inc. (NYSE: YUM), behind KFC and Pizza Hut, but it still turned in the largest quarterly increase of 14% in revenue, to $4.6 billion.
Other special events that contributed to the restaurant chain’s domestic growth featured the return of the popular Mexican Pizza for four months of last year. Around 45 million pizzas were sold during the relaunch.
Taco Bell executives also highlighted the help of celebrity partnerships with artists such as Doja Cat and athlete Davante Adams. A marketing campaign with actor Pete Davidson boosted breakfast items during the fourth quarter with transactions going up 9%.
This quarter’s “stellar performance from Taco Bell” helped drive overall growth for Yum Brands, Chief Financial Officer Christopher Turner told analysts.
