Chipotle Believes It Will Completely Replace Fast Food Chains

A Chipotle executive blasted “traditional” fast food chains, such as McDonald’s and Burger King, as “irrelevant” and said his company will eventually replace them.

“The predominant goal [for traditional fast food chains] is the cheapening of the raw ingredients, the automation of the work such that anyone could do it… so that they turn over their employees without any care for them, where it’s a game of value meals and cheapening the food experience,” Chipotle co-CEO Monty Moran said in an interview with Belus Capital Advisors’ Brian Sozzi.

“That is traditional fast food, and we think that’s going away,” he said. “We, and others like us, will replace that.”

Chipotle plans to undercut McDonald’s and other traditional chains by opening more outlets and expanding into different types of cuisine, as they are doing with their nascent Asian and pizza chains, ShopHouse and Pizzeria Locale, Moran said.

“Our mission is to change how people eat fast food,” Moran told Sozzi.

Chipotle is still on a tiny fraction of the size of McDonald’s. The burrito chain has just 1,700 locations that generated $US3.21 billion in revenue last year. McDonald’s, by comparison, has 35,000 outlets worldwide and revenue of $US28.1 billion.

But Chipotle’s same-store sales growth has been consistently strong. In the most recent quarter, Chipotle’s same-store sales grew 17.3% and McDonald’s were flat.

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