Chipotle CEO: This is the reason we are introducing a happy hour trial

Chipotle to Launch "Happier Hour" Test

Chipotle (CMG) is preparing to introduce a new happy hour initiative, aiming to attract more customers during midday hours. CEO Scott Boatwright shared with Yahoo Finance's Market Domination that the company will experiment with a special called "Happier Hour," featuring a selection such as two tacos and a drink at an appealing price point.

"We're eager to try this out and see how it works for us. The offer is designed to provide value to our guests and encourage visits during slower periods," Boatwright explained.

Although the final details are still being determined, Boatwright mentioned that the test menu will likely be priced under $10. He emphasized that this initiative is part of Chipotle's commitment to supporting local communities and expanding its customer base during the midday segment.

Recent Promotions and Community Engagement

Earlier this year, Chipotle distributed $1 million worth of complimentary meals as part of a Super Bowl campaign. The first 100,000 individuals to claim the codes received free food, redeemable in the United States through February 12.

Boatwright confirmed with Yahoo Finance that 100,000 meals were given away and hinted at the possibility of similar promotions in the future.

Business Performance and Challenges

Chipotle has faced a challenging year, with both earnings and share price growth slowing compared to previous periods.

In the fourth quarter, same-store sales dropped by 2.5%, as the chain continued to experience reduced customer visits and affordability concerns. During an earnings call, Boatwright revealed that 60% of Chipotle's core customers have annual incomes exceeding $100,000, sparking discussion online.

The company's forecast for 2026 fell short of Wall Street expectations, projecting flat sales rather than the anticipated 1.8% increase.

While Chipotle reported a reasonable start to the first quarter, overall sales remain muted. The company has refrained from predicting a strong rebound, noting that harsh winter weather has also discouraged diners.

Comparisons and Strategic Moves

Over the past year, Chipotle's stock has declined by 32%, whereas McDonald's (MCD) saw a 6% increase, thanks in part to aggressive marketing of new budget-friendly menu items.

To regain momentum, Chipotle is rolling out several limited-time offerings, including chicken al pastor, and has introduced a smaller grilled chicken bowl priced at $3.95 to appeal to budget-minded customers.

"We want to see a consistent return to positive traffic trends before we can make a stronger case for growth," commented JPMorgan analyst John Ivankoe.

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