Chipotle Mexican Grill to open in south Springfield

The Denver-based chain plans to open one of its “fast-casual” restaurants at South Campbell Avenue and West Walnut Lawn Street this fall, said company spokesman Chris Arnold. Chipotle plans to renovate the former Fiesta Ranchera Mexican restaurant at the intersection’s northeast corner.

Founded 14 years ago by CEO Steven Ells – a chef trained at the Culinary Institute of America – Chipotle now has more than 570 restaurants. Chipotle has 16 eateries in the Kansas City area; three in the St. Louis suburbs of O’Fallon, Chesterfield and Creve Coeur; and one near the University of Missouri in Columbia.

New spin on fast food

Chipotle has built its reputation as the antithesis to fast food by using meat from animals raised on a vegetarian diet and charging higher prices based on the cost of doing business with farmers who raise their livestock without antibiotics or hormones. Its slogan: Food with integrity.

More than half of the chicken the company serves is naturally raised, as is about 40 percent of its beef, according to Chipotle’s Web site, www.chipotle.com. And nearly a quarter of the beans Chipotle buys this year will be organically grown, up from about 20 percent last year.

“It’s definitely been something that sort of flies in the face of conventional fast food,” Arnold said. “The conventional wisdom has been that you have to keep food cheap … and – to keep people coming back – you need to add menu items or do limited time offers. … We have forsaken all of that.”

Chipotle also has forsaken conventional advertising, opting instead for word-of-mouth buzz.

Springfield competition

While Chipotle has distanced itself from traditional fast-food joints, direct competitors such as Qdoba Mexican Grill pose a different challenge. Springfield already is home to three Qdobas that are locally owned and operated by franchisee Burrito Concepts LLC. Burrito Concepts is a division of the Morelock-Ross Group of Cos. owned by Wayne Morelock and Kenny Ross.

Burrito Concepts also operates Qdoba restaurants in Fayetteville, Ark., Stillwater, Okla., and Tulsa, Okla., and there are plans to open one or two more in Springfield, said David Estes, the company’s director of operations. Estes viewed competition from Chipotle as a positive for Burrito Concepts.

“We actually welcome it,” he said, noting that Qdoba’s menu has more options than the burrito-intensive Chipotle. “They bring a better awareness of what we do.”

Arnold said Chipotle is well acquainted with Qdoba, another Denver-based chain, and he acknowledged Qdoba’s Springfield presence. The Chipotle at Campbell and Walnut Lawn also will be next to a Taco Bell.

“We’ve never shied away from going into places where there are a lot of restaurants,” Arnold said.

For the most part, Chipotle grows its business by opening new stores in existing markets. About 90 percent of stores opened in any given year are in existing markets, Arnold said, adding that Chipotle will open about 100 new restaurants this year. The company doesn’t offer franchising opportunities.

“We have looked at it and haven’t ruled out franchising, but it hasn’t been a growth-driver,” Arnold said. “You relinquish a lot of control when you start franchising.”

In 2006, Chipotle’s same-store sales increased almost 14 percent, according to an article in the March 12 issue of BusinessWeek. Last year also marked the ninth straight year that same-store sales rose more than 10 percent, according to the article.

In October, Chipotle’s largest investor – McDonald’s Corp. – fully divested its investment through a tax-free swap of class B common stock, according to Chipotle’s Web site. McDonald’s initially invested in Chipotle in 1998, when the chain had just 15 stores.