Chipotle is taking market share from traditional fast-food restaurants.
The burrito chain’s sales rose 9.3% in 2013, while its former parent company, McDonald’s, reported a 1.3% decline.
Chipotle has many qualities that make it more appealing to consumers than McDonald’s, said Brian Sozzi, chief equities strategist at Belus Capital Advisors.
Here are a few reasons modern customers prefer Chipotle:
1. Lines are fast.
Chipotle is renowned for the speed of its burrito assembly line, and even schedules faster workers for peak times. Drive-thru times at McDonald’s have slowed over the years, making it less appealing.
“Lines are scorching fast at Chipotle and excruciatingly slow at McDonald’s,” Sozzi said. “Chipotle is basically running the fastest lines in the sector.”
2. Customer service is better.
Chipotle’s renowned corporate culture shines through in restaurants, according to Sozzi.
“You get your food with a smile at Chipotle,” he said.
McDonald’s CEO Don Thompson has said that deteriorating customer service is one of the biggest problems facing the brand. He’s sending corporate representatives into restaurants to train workers.
3. Better place to hang out.
Chipotle’s restaurants have an inviting, modern feeling that’s more like a coffee house than a fast-food restaurant, Sozzi said. McDonald’s restaurants are mostly valued for the drive-thrus.
McDonald’s is redesigning restaurants to be more inviting.
4. Healthier perception.
Chipotle’s antibiotic-free meat and fresh salsas appeal to consumers. The company will be GMO-free by the end of the year.
The restaurant staff at Chipotle prep food in plain view of customers.
McDonald’s just launched a campaign to show how its food is made but the details are “unclear,” and the company is still plagued by allegations of artificial fillers and pink slime, Sozzi said.
It’s the weekend! Time for a #BurritoBowl
5. Trendier image.
Chipotle has a cool, trendy image that makes people proud to eat there, Sozzi said.
“It’s simply cooler to share on Twitter or Instagram that you went to Chipotle compared with McDonald’s,” he said. “Who doesn’t want to be cool?”
To improve public perception of the company, McDonald’s is doing a global audit of its marketing departments.
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