Photo: Kim Bhasin, Business Insider
Taco Bell’s new Cantina menu features the same concept as Chipotle–but for half the price. The Cantina menu is supposed to knock out the fast casual competition. Taco Bell hired a celebrity chef and worked on offering fresh ingredients at a lower price than Chipotle.
But there are three reasons why Chipotle shouldn’t sweat the upcoming competition from Taco Bell, according to a note to clients by John Glass at Morgan Stanley.
The reasons are:
1. There are “vast differences” in product quality. Chipotle’s ingredients are better than Taco Bell’s–and consumers have already shown they’ll shell out for the good stuff. The report also cited when McDonald’s entered specialty coffee with no impact on Starbucks.
2. The target demographics are totally different. Chipotle and Taco Bell have two very different customers and aren’t likely to change their eatery of choice.
3. Chipotle and Taco Bell aren’t geographically close. Only 28 per cent of Chipotle stores are within half a mile of Taco Bell, according to the report.
Even though Taco Bell has high hopes for its Cantina menu, the offerings aren’t likely to sway customers from fast casual chains.
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