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FOOD FOR TRUST

Chipotle’s latest comeback strategy: a customer rewards program

By Chase Purdy

Still reeling from a food safety crisis that sent consumer confidence and its stock price tumbling, Chipotle Mexican Grill is launching a new strategy for bouncing back.

It’s simple. By rewarding people for gorging on burritos all summer, the chain wants to remind consumers why they liked Chipotle to begin with, and hopefully recapture the foot traffic it once enjoyed. Executives at the company are calling it “Chiptopia Summer Rewards,” and it amounts to a three-month blitz in which people will get free food for every fourth, eighth and eleventh entrée purchase they make.

As consumers make more purchases they’ll swipe a special “Chiptopia” card and be elevated in status from mild to medium to hot. Ascension to each level triggers a special bonus reward.

Using free food to lure people through the front door isn’t new for Chipotle. The company in the spring issued 6 million free food coupons to consumers, amounting to about $39 million worth of free burritos (based on the price of a chicken burrito).

Success of the new, three-month promotion will be critical for Chipotle, which needs to regain the favor of Wall Street following a food safety outbreak in 2015 that sickened more than 300 people across 14 states, hospitalizing 22. News of the norovirus outbreak dented foot traffic so badly that one company executive told investors it was “kind of eerie” for customers to pass by once-busy locations and find short lines.

A recent poll found that Chipotle—once the favored fast-casual restaurant for Tex-Mex food—had fallen behind Moe’s Southwest Grill, Qdoba, Taco Bell and Baja Fresh.

The company will update investors on its progress July 21, when it reports its second quarter results.