Chipotle pushes forward with ABQ expansion
Chipotle pushes forward with ABQ expansion despite slowdown in new stores
With Chipotle Mexican Grill still struggling to bounce back from its foodborne illness outbreaks last year, the company's second quarter same-store sales didn't recover as quickly as its execs expected.
Chipotle reported average unit volume sales are down to $2 million, compared to $2.5 million a year ago.
During an earnings call last week, Chipotle's executives suggested the restaurant company will rethink its new store development plans.
National Real Estate Investor reports Chipotle expected to open 220 to 235 new stores this year, and 116 new restaurants have already been opened.
But Chipotle's co-CEO, Monty Moran, said the real estate team will now access "future openings with a more conservative lens that takes into account our current economic model. This may slightly temper the number of openings in these markets in the near term as we look to rebuild our sales momentum and will help us ensure strong new store productivity."
Albuquerque has two Chipotle stores under development right now. One is on Coors Boulevard on the Westside, where developers razed a former gas station to build a new shopping center anchored by Chipotle. The other is the redevelopment of the former Denny's across from the University of New Mexico.
Chipotle also recently opened a location in the Coronado Center mall in November, and another Chipotle location is underway in Clovis.
Brett Hills, a director with the commercial real estate firm NAI Maestas & Ward, is Chipotle's tenant representative in the New Mexico market.
Hills said Chipotle's original goal was to open 10 locations in New Mexico over five years, a goal that is still on track despite the news reports of a slowdown in Chipotle's new store development.
"A year ago we had three Chipotle stores in New Mexico and now, with new stores that are either open or under construction, we'll be at seven," Hill said. "So we're on target for what our original goal was, and we'll probably do another two to three stores in the next 12 to 24 months."
Hills said another new deal is in the pipeline, but couldn't say where it would be.
The real estate broker said he's noticed the process to open a new Chipotle location has taken longer, but other national brands are rethinking their real estate strategies, too.
"They’re having me do more research. But that's something I'm seeing throughout the real estate environment right now. I think it's important to recognize that a lot of my other national clients are also adhering to stricter guidelines for their real estate criteria," Hills said.