Chipotle leans into burritos to-go with first digital-only restaurant

As more people turn to takeout and delivery, leaving restaurants across the country empty, cash-strapped restaurateurs have been forced to chase down dollars in novel ways, including testing new concepts or paring down operational costs with ghost kitchens. Such facilities can be urban warehouses containing multiple small kitchens leased by a restaurant or a restaurant subcontractor for delivery only, eliminating the need for premium locations and fancy buildouts. Orders are often delivered by “third-party aggregators” such as DoorDash, Uber Eats or Grubhub.

McDonald’s opened a ghost kitchen restaurant last year in London, and Chick-fil-A and Qdoba, one of Chipotle’s competitors, have also been experimenting with the model that allows for higher profits and lower labor costs.

“The Digital Kitchen incorporates innovative features that will complement our rapidly growing digital business, while delivering a convenient and frictionless experience for our guests,” Curt Garner, Chipotle’s chief technology officer, said in a statement. “With digital sales tripling year over year last quarter, consumers are demanding more digital access than ever before.”

Chipotle’s new approach transforms the sizzles and scents and steeliness of the Chipotle dining room into … a lobby “designed to include all of the sounds, smells and kitchen views of a traditional Chipotle restaurant,” the company said in a news release. There will be a dedicated entry and pickup space for large catering orders. Guests will have to order in advance through, the Chipotle app or third-part delivery partners.

Deliveries were already on the rise before the pandemic, but in the age of shutdowns and social distancing, it has become a rare pathway to growth in an otherwise meager landscape. A study by the NPD Group found that delivery orders climbed 67 percent in March, even as restaurant traffic slumped 22 percent. There are currently about 1,500 ghost kitchens in the U.S., Restaurant Dive reported, but that number is expected to soar; one report from Euromonitor predicted that the ghost kitchen market could be worth $1 trillion by 2030. Food delivery revenues overall are projected to hit $24 billion by 2023, according to Statista.

Chipotle has felt the delivery boom in recent months, with digital sales rising more than 200 percent year over year last quarter to more than $776 million, which was nearly half of all the company’s sales for in the third quarter.

Chipotle has more than 2,700 locations in the U.S., Canada, the United Kingdom, France and Germany. It employs a workforce of more than 94,000. Its stock was up nearly 2.9 percent in morning trading Wednesday.

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