Fast-casual restaurant stock Chipotle Mexican Grill (CMG) knows that offering people free stuff in exchange for their loyalty is a winning strategy. Sufficiently winning, in fact, that businesses have been using the “rewards program” concept for decades. Chipotle recently launched a new version of its rewards program called Rewards on Repeat, and investors were clearly on board. Chipotle shares gained fractionally in Monday afternoon’s trading.
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The Chipotle Rewards program now has a recently modified app to its credit, as well as a new platform to work from. Rewards on Repeat is intended to “…deliver more frequent rewards, greater flexibility and deeper everyday engagement for members.” With half of all restaurant loyalty program signups coming from Gen Z users, it is clear the next generation of restaurants will heavily depend on just what the loyalty program offers.
Starting today, April 13, all new members automatically get a free order of Chips and Guac with purchase. That is a good start, certainly, but Chipotle stands ready to follow up. Freepotle is coming back as well, the monthly free bonus rewards drop that means free food for members. Members also get access to a “choose your own birthday reward” program, which offers your choice of free chips, guac or queso, or a fountain drink. More rewards are waiting beyond these points as well, making it a clear value.
Chipotlane Hits Odessa
Meanwhile, the Chipotlane is expanding, hitting a new location in Odessa, Texas. The Chipotlane is a drive-thru pickup lane that is exclusively reserved for advance digital orders. This is also reportedly the first such Chipotlane in Odessa, which is something of an advance for the area.
The idea is actually quite clever; instead of having people who placed orders ahead of time wait in the regular drive-thru lane, those people get their own special lane to pick up their orders. It also removes the idea that those placing orders at the drive-thru have to wait for other people to pick up their orders. It make the advance order people feel special, and helps keep the flow moving at the drive-thru, which is welcome for anyone involved.
Is Chipotle a Buy, Sell or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on CMG stock based on 21 Buys and six Holds assigned in the past three months, as indicated by the graphic below. After a 31.08% loss in its share price over the past year, the average CMG price target of $45.04 per share implies 30.74% upside potential.