Free Burritos Helped Chipotle’s Foot Traffic — and Hurt the Competition

Remember all those free burritos Chipotle gave out in the wake of its highly-reported food safety scandal? Turns out, a lot of people got in on that. But once the deal was over, they didn’t continue patronizing Chipotle.

According to a new report from location-based marketing firm xAd, which examined foot traffic in April, May, and June of this year, the chain saw an uptick in foot traffic that correlates with its free burrito promo. In April, traffic was up 1.68 percent, but dropped again in May (to 1.63 percent), just as the promo was ending.

The report, which examined 37 million visits to restaurants using mapping technologies and location-based apps, shows that the burrito chain did in fact manage to grow its share of fast-casual diners between April and June. Despite a drop in traffic after the end of the burrito promotion, Chipotle’s overall share of the fast-casual market still increased by about 8 percent in the second quarter.

“They were really taking a hit in January and February,” notes xAd's senior director of research, Sarah Ohle. “But their promotion worked.”

To better gauge how Chipotle has fared in the months since its food safety scare was resolved, xAd decided to compare it to one of the chain’s competitors: Qdoba. “Qdoba unveiled a pretty aggressive ad campaign against Chipotle,” says Ohle, referencing Qdoba’s “Hunger doesn't accept rain checks” tweet that went out the day Chipotle closed for food safety training. “They came after Chipotle pretty hard, so we were curious to know how that went for them.”

Though Qdoba did see a “little bit of traction,” says Ohle, as a result of customers looking for Chipotle alternatives, that didn’t last for long. “In June, Qdoba’s traffic faded out as people started going back to Chipotle.”

While Qdoba saw a temporary boost at Chipotle’s expense early in the year, Chipotle’s numbers didn’t stay down for long. Since January, Chipotle has gained back four percent of the fast-casual share versus Qdoba, according to the report.

xAd

Interestingly, Ohle says that Qdoba isn’t necessarily helping itself by going after Chipotle’s customers. “Chipotle’s traffic — at least, from what we’ve seen — is largely driven by people at work. The lunch rush is really a sweet spot for them,” she says. “Qdoba plays better on the weekends. It might be in their best interest to think a bit differently about maybe filling that gap, rather than trying to dig into Chipotle’s traffic.”

In July, Chipotle unveiled its latest attempt to get customers in the door — Chiptopia, a loyalty program that rewards customers for buying burritos with, well, more burritos. Company executives say the program is working to lure back once-loyal customers. Though xAd’s recent report doesn’t include foot traffic in July, the company was able to supply Eater with more recent data.

“Foot traffic for Chipotle was up again in July,” says Ohle, who says the chain’s share of traffic was up 1.62 percent compared to other quick-service and fast-casual brands. “So while it’s not quite where it was in April with the free burrito promo, Chiptopia lifted foot traffic up to the same level as [burritos] did in May, and is definitely ahead of where they were in the first quarter.”

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