College students are quietly one of Chipotle's most important customers
Hollis Johnson/Business Insider
- Just 15% of Chipotle locations are located in college towns but perform "exceptionally well," according to the CFO.
- Students buy more burritos and bowls when they're at school than when they're back at home.
- Chipotle has promoted deals and events to gain loyalty from college customers.
College students are the stereotypical Chipotle customers, and they're a key part of the chain's success.
The chain has about 3,000 US restaurants, with 15% of those located in college towns, CFO Jack Hartung said in a July earnings call. Sales at those locations have suffered over the last few years as COVID-19 disrupted normal school year activities and left many students studying remotely, Hartung said.
College town locations "really performed exceptionally well during the school year" when classes are in person, Hartung said in the same call, with things finally getting back on track this year for the first time in three years.
When college students leave their college towns and go home for the summer, they don't just shift sales to their nearest Chipotle.
"When we track the individual customers, they tend to visit Chipotle to a lesser degree when they're away from college," Hartung said, possibly attending the trend to an effect of "mom's home cooking" when students are back with their families. Chipotle sales among that demographic are starting to recover as many schools are back on pre-pandemic schedules.
Chipotle has used other promotions and marketing decisions to target college students in the past. In 2020, the fast-casual chain advertised gift cards for graduating high school students, with the first 5,000 buyers getting an additional buy-one-get-one offer. Chipotle also hosted a virtual prom and virtual senior day for high schoolers about to graduate, who could potentially become loyal customers in college. The chain has offered other promotions geared toward college students, like free drinks with a student ID and early delivery adoption specifically for college students.
The relationship between college students and Chipotle goes both ways. In 2019, the chain released a list of the top 25 colleges that ate the most Chipotle. For college students who presumably feel strongly about getting their regular Chipotle, sports website SB Nation ranked 128 colleges with Division I football teams by their proximity to Chipotle. An Ohio college even bragged about its Chipotle vicinity to attract prospective players, per The Bleacher Report.
The typical Chipotle customer is a white millennial between 25 and 34 years old, likely with a college degree and making over $80,000 per year, according to data provided by analytics firm Numerator. College students still make up a significant, but smaller, percentage of customers, according to Chipotle. Students who become loyal to Chipotle in college could go on to become those young adults with college degrees that make up typical customers.
Do you have a story to share about a retail or restaurant chain? Email this reporter at mmeisenzahl@businessinsider.com.
from Business Insider https://ift.tt/yK7V1vU
No comments