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Chipotle (CMG) Augments Loyalty Program, Digital Sales Cross $2B

Chipotle Mexican Grill, Inc. CMG recently announced the digital enhancement of its loyalty Chipotle Rewards program. Till the first half of 2021, the program exceeded $2 billion in digital sales. At present, the Chipotle Rewards program has more than 24 million active members, setting the record of being the fastest growing loyalty programs in the restaurant industry.

Chipotle formally launched Extras – a special feature for Chipotle Rewards members to earn extra reward points. Extras enables Chipotle members with various customized challenges to earn bonus points and win badges. These points can be redeemed for a wide range of rewards like free Chipotle Goods, menu items, apparel, and much more. Reward members have the chance to earn 10 points for every $1 spent at the restaurant, online or through the app. With Extras, the possibility of winning reward points is bigger now.

With respect to this, Chris Brandt, Chief Marketing Officer of Chipotle, stated, “The new Extras feature gamifies Chipotle Rewards through special challenges and allows Rewards members to celebrate their achievements with special badges.”

Digitization to Drive Growth

Chipotle is focusing on expanding its digital program to drive growth during the coronavirus pandemic. In order to drive digital sales and retain customers amid the coronavirus crisis, the company is leaving no stone unturned to make digital ordering more appealing to customers and more efficient for its restaurants.

In this regard, Chipotle has redesigned and simplified its online ordering site, enabled online payment for catering, online meal customizations and collaborated with several well-known third-party providers for delivery. Also, there has been a significant increase in digital orders and guest satisfaction since the rollout of its “Smarter Pickup Times” technology.

During first-quarter 2021, the company-initiated an investment in Nuro for the expansion of its delivery services in Europe. The idea of using robotics-based autonomous vehicles for delivery purposes is likely to enhance customer experience in the upcoming periods.

So far this year, shares of Chipotle have gained 36.9% compared with the Zacks Retail - Restaurants industry’s 14.5% growth. The upside is primarily driven by the company’s focus on food safety and enhancing customer experience along with various sales-building and strategic initiatives.

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Zacks Rank & Key Picks

Currently, Chipotle carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the same industry include McDonald's Corporation MCD, Jack in the Box Inc. JACK and Papa John's International, Inc. PZZA, each carrying a Zacks Rank #2 (Buy).

McDonald's has a three-five-year earnings per share growth rate of 8.7%.

Jack in the Box has a trailing four-quarter earnings surprise of 26.4%, on average.

Papa John's earnings for 2021 are expected to rise 122.9%.

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