Chipotle has been luring customers back to its restaurants with the promise of free burritos in the wake of E. coli outbreaks linked to its restaurants.
The promotions have successfully persuaded some of Chipotle’s most loyal customers to return to the chain, but “casual” customers will be harder to win over, Reuters reports.
“People who are seriously loyal are easy to win over,” Tushar Parashar, marketing strategist at Vivaldi Partners Group, told Reuters. For casual customers, however, “A free burrito is not enough to get you to come back,” Parashar said.
Chipotle’s same-store sales, or sales at restaurants open at least a year, fell 14.6% in the fourth quarter that ended in December, and Chipotle said same-store sales fell another 36% in January.
Chipotle executives have said customer traffic and profit margins won’t fully recover until 2017.
“It’s going to be messy in terms of margins, it’s going to be messy in terms of earnings,” Chipotle Chief Financial Officer Jack Hartung said in January, referring to the rest of 2016. “We’re not going to be the efficient business model that everyone has come to know.”
Analysts agree it’s going to take the company a long time to dig out of its sales slump.
JPMorgan analyst John Ivankoe has predicted that same-store sales will decline 12%, 7%, and 4% in the first, second, and third quarters of this year.
Chipotle is expected to provide an update on its business at a conference in New York on Wednesday.
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