MORE INSIGHTS. MORE OFTEN. BETTER RETURNS. Richard Church
[email protected] (203) 307-2581 Chipotle Mexican Grill: Leavening Panera Bread’s Sales? April 29th, 2016 DISCERN platform reveals: • Over 80% overlap between Chipotle and Panera in all regions within a 5-mile trade area • Other potential dining alternative beneficiaries from Chipotle challenges Chipotle Mexican Grill’s recent issues with food contamination and the resultant heavy losses of customers are widely known and do not appear to have ended judging by its first quarter earnings release. In its April 26 release Chipotle reported another significant decline in its same-store sales of 29.7%. Conversely, Panera reported a 6.2% increase for the same fiscal period. Key Takeaway As Chart 1 illustrates there appears to be a meaningful correlation between the trend of Chipotle’s same-store sales and Panera’s as Chipotle’s food contamination issues surfaced. This would largely be attributable to the high competition intensity between the chains as the illustrations below show. Chart 1. Chipotle & Panera Bread Comp-Store Sales Spread 30% 20% 10% CMG 0% PNRA -10% Spread -20% -30% 1Q15 2Q15 3Q15 4Q15 1Q16 Downloaded from www.hvst.com by IP address 192.168.160.10 on 09/26/2021 MORE INSIGHTS. MORE OFTEN. BETTER RETURNS. Illustration 1, which is from DISCERN’s database of retailer and restaurant locations, quantifies to what extent Chipotle and Panera overlap within their respective five mile trade area geographies. The data shows that Chipotle and Panera compete within the same five mile trade area in 86% of the total trade areas, a significant amount of restaurant overlap for 2 large competitors within the fast casual restaurant sector.