Tuesday, July 23, 2024

This restaurant just unseated Chipotle as the most popular Mexican chain


People with a hankering for a burrito are no longer beelining for Chipotle first. Or second, or third, or fourth.

Moe's Southwest Grill, a Tex-Mex chain with less than half the number of locations as Chipotle, has unseated the former fast casual king as the most popular brand selling Mexican-inspired food, according to an annual survey out Thursday from Harris Poll that measures how people feel about restaurant brands. Moe's has more than 650 restaurants to Chipotle's more than 1,900.

Moe's, which is owned by the same company that operates shopping mall mainstays Auntie Anne's and Cinnabon, claimed the "Brand of the Year" title for fast casual Mexican restaurants for the first time, while Chipotle fell hard. The No. 1 pick for the past three years, it's now ranked below not only Moe's but Taco Bell, Qdoba and Baja Fresh.

The survey is yet another sign of the harsh impact Chipotle's food-safety issues have had on the brand in the past year. Chipotle has been grasping at a former semblance of its reputation as a purveyor of fresh food in the months since dealing with multiple incidences of E. Coli and norovirus at restaurants across the country. Sales tanked, a rude awakening for a brand that had been wildly popularity for years.

The company has said customers are coming back around though, and has tried to lure customers back with offers for free burritos and buy one, get one deals. In the first quarter, sales at stores open at least a year fell nearly 30%, though the company said transaction volume improved as the quarter went on. A a free burrito offer in February had a 67% redemption rate.

But beyond Chipotle's issues, the fast casual restaurant landscape has also become more competitive as chains have gone head to head to offer customers healthier food and new menu options. Qdoba rolled out a new taco menu last year with fillings like tequila lime chicken, steak and bacon; Taco Bell has gained prominence for its breakfast menu and started selling alcohol in some restaurants last year. Moe's is known for a wide selection of ingredients for build-your-own tacos, quesadillas and burrito bowls — the brand also frequently offers limited time menu additions, such as an ancho chili lime rice bowl and seasonal salsas like ghost pepper and mango tomatillo.

Chipotle, meanwhile, has rarely introduced new menu items, and some say the company hasn't done enough to show customers its food is safe to eat, even though it has adopted new food safety protocols.

"Their sales have been under tremendous pressure," says Andrew Charles, an equity research analyst with Cowen and Co. who follows both Chipotle and Qdoba. "Brand perception is down. In retrospect, I just don't think they did enough to convince customers that Chipotle food was safe to eat," pointing out that there are no signs in stores alerting customers to the changes and announcements on social media have been scarce.

Moe's rose to the top for ranking the highest in familiarity, quality and purchase consideration. Harris Poll surveyed more than 97,000 U.S. consumers for their thoughts on more than 3,800 brands. Moe's has benefited from a rapid expansion in recent years, which has given the brand a stronger position as a Chipotle alternative, says Lisa Recoussine, vice president of client services at Nielsen, which owns Harris Poll. Moe's opened 70 new restaurants last year, when sales hit nearly $640 million.

To be sure, Chipotle still has much larger market share and sales, which were $4.5 billion in 2015. According to Placed Insights, an analytics firm that measures traffic trends, just 2.3% of the U.S. population visited a Moe's last month, while nearly 9.4% visited a Chipotle.

Though the poll results show Moe's may be poised to steal more customers, says David Shim, CEO of Placed Insights.

"Moe’s has an opportunity to continue to convert that brand equity into restaurant visits," Shim says, "closing the visitation gap with Chipotle."

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Author: Red

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