Has Chipotle lost its cool?

People aren't recommending the fast-food chain like they used to, analysts say.

By Kim Peterson Apr 4, 2013 2:12PM

Credit: GUS RUELAS/Newscom/RTR

Caption: File photo of Chipotle Mexican Grill in Beverly Hills, Calif.
Analysts at Goldman Sachs (GS) have begun to see a trend that should worry Chipotle Mexican Grill (CMG): It doesn't seem as cool anymore.


When asked whether they would recommend Chipotle, consumers increasingly answer no. The falloff in that likely-to-recommend score means Chipotle "may be losing some of its 'cool factor,'" Goldman analyst Michael Kelter said, according to StreetInsider.com.


Even worse: This falloff coincides with a decline in interest in Chipotle among younger adults.


Goldman has been seeing this for a while. Last November, analysts saw a fallback in Chipotle's brand score, Barron's reports. At the time, analysts thought it was a statistical anomaly, and they may have been right. Chipotle's brand score did indeed come back up for the first quarter of this year.


But that comeback is muted somewhat by the fact that people aren't recommending Chipotle like they used to.


Chipotle's stock price has seen an incredible run over the last four years, going from $50 at the start of 2009 to top $400 last year. But the stock has since slumped, and has flattened out recently at about $325.


Investor David Einhorn has turned against Chipotle, saying its valuation is too high and that it will lose customers to Taco Bell, owned by Yum Brands (YUM). And Taco Bell has seen a huge resurgence with American consumers after a string of smart product rollouts, including the Doritos Locos taco, which is so popular that Taco Bell had to hire 15,000 more people last year to handle the extra business, The New York Daily News reports.


More on moneyNOW

Apr 4, 2013 3:35PM

I love Chipotle, but the prices are too high, the restaurants are extremely noisy, and there is never enough seating. I have had to stand and balance my tray on the ledge behind the soda fountain!

Apr 4, 2013 4:05PM
Chipolte is wonderful. Fresh food made well. Taco Bell, not so much.
Apr 4, 2013 7:12PM
The restaurants are too noisy with all the bare wood and steel. The sides like the guac and chips are way to expensive for what you get. The burritos and bowls are about the same as or less expensive than a McD's medium extra value meal. Much fresher and better ingredients than other quick food establishments. But then all quick food is pricing itself out most people's price range. Never been in a smoky Chipotle like others mentioned earlier.
Apr 4, 2013 8:20PM
The problem is consistency. I lived in Colorado and used to eat at the original Chipotle where you had to stand in line for 20 minutes to get served. Loved it. Then they sprang up all over the Denver-Boulder area and they were great-- fresh food, fast service, and clean. The workers really took pride in producing a quality product.

I moved to California and they are terrible. Dirty eating areas, very poor and inconsistent quality food preparation, and lazy kids working the counters. One opened last year in our small town; half of the time the steak is so undercooked it's nearly raw in the center. Also, one was so dirty (overflowing trash cans, food waste on every empty table, filthy restrooms) that my wife took pictures and e-mailed them to the company.

Why is it slipping? Pay more attention to franchise quality control at the corporate level so that every restaurant is consistently good. Until then, Chipotle loses our money.

Apr 5, 2013 8:30AM
I can get a authentic burrito right down the street from my workplace, support a local business and it's cheaper!  Doesn't surprise me this company is starting to flatten out.  The average person is seeing 2% less in their paycheck since January which decreases their discretionary income = no more $7 burrito (more if you actually get chips or a soda).  That or maybe people are starting to realize Chipotle is a little over rated.      
Apr 4, 2013 4:37PM
I think it is like everything else... too much of it and it's not great anymore....well almost everything.
Apr 5, 2013 12:46AM
Chipotle prices are way to high.for what you get. From an investor's point of you their low food cost is attractive. It can't be much more than 20% ,with the most costly part of the burrito being the 2-3ozs. of pork, chicken or cheap beef. The rest ,rice,onions, peppers,cheese and sour cream can't cost more than a buck, the few times I've been there a burrito and a coke is almost $10,extra for guacamole plus they have a tip dish.  Eventually i realize that for $4.00 more  i could go and have a steak dinner at a chain restaurant like Outback.
Apr 5, 2013 12:33AM
Apparently, if the hipsters don't think you're restaurant is "cool" anymore, it will devalue your brand.
Welcome to the new world of ever-changing social media. If you're not trending today, you're nothing!
Apr 5, 2013 12:58AM
You can make better mexican food than chipotle. Lean steak + lime + salt + cilantro, plus you don't have to pay for marked up burritos loaded with rice and beans. Lame. 
Apr 4, 2013 7:46PM

Do not like Chipolte at all.  One recently opened in my town. It's quite small with a poor layout.  The people line up along the window and loom right over the diners as they eat.  There is no divider to separate the line which moves very slow.  As others mentioned it is noisy and I do not like the unfinished look. There burritos tend to be more rice than anything.  Moe's Burritos is way better in my opinion.  They offer more choices and you get to choose the ingredients/toppings that you want.   They give you free chips and several types of salsa to choose from.  Also they have Queso and Southwest Sauce.  I asked for Chipolte Sauce (or a spicy sauce) at Chipolte- they do not even have.  Most of the Moe's in my area have the Coke Freestyle soda machine which is awesome.


Apr 4, 2013 5:03PM
Love Chipotle :-) The ones in my area are always very busy!
Apr 4, 2013 3:38PM
Chipotle gives me gas so bad my wife threatened to leave me. Man, did that stink!
Apr 4, 2013 5:21PM
Apr 4, 2013 7:31PM
I got 3 soft tacos from chipotle about a month ago and they tasted completely stale and mushy.   Ewww.......Chipotle is totally not cool anymore like it once was.   
Apr 4, 2013 8:25PM
I've been to Chipotle a few times and never liked it. The beef in the taco I had was so tough, I spit out many pieces. Any joint that doesn't give free chips is lame, too. I'd rather you charge me an extra 50 cents per item so I can get my chips.
Apr 5, 2013 1:53AM

The closest Chipotle to my home is a few miles away and without a car I seldom go there.  While I do like their vegetarian burrito, it's expensive and is the only thing on their very limited menu that interests me, I just make my own at home, which is quick, easy, and cheaper.  They need to consider adding a few more vegetarian options such as a giant tostado, chile relleno, soup, and salad.  They always play loud rock music that adds to the general din of talking and cooking equipment, and I want peace and quiet while I eat.  I also like to read while eating but their lighting is dim, though in good weather one can eat in their small outdoor space.  Also sometimes tables are not clean.  All of that diminishes enjoyment of the meal for me.  I hope either Chipotle's improves or some other restaurant can take advantage of disgruntled customers who are now resorting to Taco Bell for affordable Mexican fast food.

Apr 5, 2013 12:15PM

All be dam if I ever let anyone tell me what is cool or what is not cool...what are we in Jr. high? Oh and Chipotle and Taco Bell are not even close...I eat at both but Taco Bell??...give me a break..that is not even meat and is more of the 2:00 am I am so drunk and hungry type of spot imo. ..

Apr 5, 2013 1:57PM
I am astounded at how bitchy you people are. 

The lighting is too low.  I can't read there.  
The prices are too high. 
It's too loud.  
One time the garbage was overflowing.  Let's  take a pic and send it to corporate.
I don't like that people look at me when I'm eating my food.
They need to have onsite recycling for the foil.
They play rock music instead of soothing Jazz music.  
It's cold-looking inside.  

Typical fickle American consumer for ya.  Why don't y'all go spend some time in the sandboxes of the middle east like I have, then maybe you'll stop your bitching about such insignificant things.  

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