Inside the “Chipotlane” strategy

Don’t call it a “drive-thru.” Chipotle says its pick-up window is faster, more efficient, and part of an industry-wide effort to promote takeout over delivery.
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· 5 min read

This is Part 1 of a two-part series about how restaurants are investing in pick-up windows to increase sales and rely less on delivery.

Here’s a tip if you ever find yourself chatting with Tabassum Zalotrawala, Chipotle Mexican Grill’s chief development officer, about the take-out windows they’ve dubbed “Chipotlanes”: Do not call them “drive-thrus.”

Drive-thrus typically refer to the system that dates back to the Packard era, where drivers roll up to a two-way speaker, order from a menu board, and proceed to the window to pay and receive the order.

“If we were talking about drive-thru windows, the conversation would be over because we don’t have any,” Zalotrawala told us at the onset of a recent interview. “All we have is digital pick-up windows.”

Chipotlanes have no speakers or menu boards because their users have ordered and paid online (or through the Chipotle app). It takes an average of fewer than 30 seconds per order, Zalotrawala told Restaurant Dive, compared to a traditional drive-thru at Taco Bell, with an average service time of 221.99 seconds—the industry’s fastest in 2022 per QSR magazine—or Chick-fil-A, the slowest at 325.47 seconds.

More and more restaurants are trying to entice consumers to choose pickup—not that it takes much arm-twisting. For inflation-bedraggled consumers, picking up saves on delivery fees and tips, and they get their food faster and hotter than from a delivery driver. And for restaurants, pick-up saves the expense of third-party delivery providers.

Guac before you run: Chipotle began testing the Chipotlane concept at a few locations in May 2018, adding several more in 2019, Zalotrawala said.

It caught on fast.

“It took us opening not even like, a handful of restaurants in 2019 to realize that, ‘Oh my gosh, this truly is a game changer,’” Zalotrawala said. Sales at Chipotlane restaurants average 10% to 15% higher than at restaurants without the lanes, according to Zalotrawala.

A Chipotlane pickup constitutes “a higher margin transaction” than delivery, said Zalotrawala. That’s no wonder since third-party delivery apps like DoorDash and GrubHub charge restaurants fees as high as 30%.

For Chipotlane restaurants, Zalotrawala explained, those lower-margin deliveries represent a portion of overall sales that is about six percentage points lower than those without take-out windows, whereas higher-margin, order-ahead transactions represent a portion about 12 percentage points higher.

So the company was sold on Chipotlanes before the pandemic hit and online ordering and social distancing became the norm.

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“Digital became the primary way that guests could interact with brands and Chipotle was no different,” Zalotrawala said. “And we really began to see the value of our lane then and it further reinforced that we were on the right path.”

Express lane: Darren Tristano, a longtime restaurant industry analyst and CEO and founder of Foodservice Results, noted that pick-up windows can be far more efficient than building out traditional drive-thrus.

“What a [restaurant] unit is looking for is, ‘How do we take advantage of pick-up without having to put up a drive-thru window ordering mechanism [and] staff it with someone who’s taking the order and putting the order in?’” Tristano said.

He said systems like Chipotlanes are “integrating these orders directly into their online ordering or app system. And then all they really need is…somebody to hand it off since, in many cases, it’s paid for in advance.”

Of Chipotle’s roughly 3,100 restaurants, about 550 of them now include Chipotlanes, Zalotrawala said.

Speaking on an earnings call on Feb. 9, Chipotle CEO Brian Niccol said that of the 236 restaurants Chipotle opened in 2022, all but 34 of them had Chipotlanes. And of the 255–285 new restaurants the company plans to open in 2023, more than 80% will include Chipotlanes.

For Zalotrawala, that means her team has a different set of criteria when looking for sites for new restaurants.

“This was a very, very focused and thoughtful real-estate strategy,” Zalotrawala said.

One predictor that a site is suitable for a drive-up window, naturally, is that it already has one, which is why Chipotle has sought “preexisting QSR locations that we’ve been able to convert, or preexisting bank locations,” she said.

According to Realtor Magazine, properties with existing drive-thru lanes are “being sold at a premium” and commanding rents that are as much as 20% higher than those without lanes.

For older locations, Chipotle is exploring adding Chipotlanes, which it did with 15 locations in 2022, Zalotrawala said. And for existing locations where a Chipotlane can’t be added, “we’ll carefully identify those candidates and relocate them,” she said.

Calling some of those relocations “new” locations, though, could be a stretch.

“The relocation could be literally within that [same] shopping center 100 feet away or 200 feet away,” Zalotrawala said.

Next time in Part 2: How LaRosa’s Pizzeria tackled pick-up.

Retail news that keeps industry pros in the know

Retail Brew delivers the latest retail industry news and insights surrounding marketing, DTC, and e-commerce to keep leaders and decision-makers up to date.