Despite a successful quarter that handily beat analyst expectations, Chipotle is not satisfied. In recent earnings calls, the US fast-food chain’s co-CEO, Montgomery Moran, has provided consistent updates on one of the company’s core obsessions—serving as many people as possible during its peak hours, when lines often snake out the door of some restaurants and cause bottlenecks. This quarter, throughput was the fastest ever, with eight more transactions per hour during both the peak lunch and dinner hours compared to last year.
“We are the fastest we’ve ever been at lunch time and at dinner time,” Moran said in the companies earnings call, “but the averages throughout the entire day are speeding up as well.”
But the quest is far from over, according to Moran. After an analyst seemed to take for granted that increases in throughput must slow down, the co-CEO took umbrage. ”You sort of made this assumption that the gains in throughput might diminish over time,” Moran said. “I’d tell you I don’t accept that as being something that’s going to be true in the near or even medium term, perhaps not even in the long term.”
According to Moran, the speeds that Chipotle can reach in short bursts indicate that there is room to improve. ”When we measure our 15 minute transaction counts ….that number is much higher,” Moran said on the call. “If you multiply that times four to cover a whole hour, it’s much higher than our average throughput number is, which shows that every restaurant basically has a skill to deliver throughput at a much higher level than they’re currently doing.”
With an average transaction rate of between 110 and 120 per hour last quarter during lunchtime, a “much higher level” would mean some pretty serious speed.
Moran attributes the continued gains in speed in part to the “four key pillars” of throughput: Having a worker dedicated to restocking and problem-solving; proper ingredient preparation; putting the best people at their best stations; and having a dedicated expediter at peak times.
The company has also rolled out diagnostic data tools which Moran says have helped managers boost transactions and pinpoint the pillars they can improve on.
But the biggest element, Moran says, is the continued expansion of the company’s “restaurateur” program, which promotes managers who can demonstrably hire and manage excellent people and improve performance of those around them. Through this mix of technology, management, and strategy, the march towards maximum burrito velocity continues.