Chipotle Mexican Grill, Inc. (CMG): Catering Service And Increased Marketing Will Drive Growth For This Restaurant Company

Peer review

Chipotle Mexican Grill, Inc. (NYSE:CMG)’s major competitors in the high growth segment are Panera Bread Co (NASDAQ:PNRA) and Jack in the Box Inc. (NASDAQ:JACK). Panera is looking to attract customers to the stores with the introduction of a new “pasta menu” category. Apart from pasta, it has also added shrimp and salad to the menu. This new menu will be available nationwide in 2013. The company is also spending more on marketing, with an increase in marketing spend by 30% in 2013. It’s using promotional events like direct mail, loyalty cards, and social media, while promoting pasta as a dinner option to drive sales in 2013.

Jack in the Box Inc. (NASDAQ:JACK)’s stock price has increased by around 50% over the last year. Jack in the Box is looking for profitability in the future through transformation toward the franchise business model. It’s looking for operational and structural changes to suit its franchised business model. The Qdoba business division has appointed Tim Casey as a new president who will bring in the leadership experience of a high growth brand, like Starbucks Corporation (NASDAQ:SBUX), to the company. The company has outstanding share repurchase authorizations of 50 million and 100 million expiring at the end of 2013 and 2014, respectively. It’s expected to execute these programs within the time frame.

Conclusion

Chipotle Mexican Grill, Inc. (NYSE:CMG) has taken several initiatives like a catering service, new marketing campaigns, and promoting the quality of the food. Store expansion, including ShopHouse stores, will drive new store sales growth. This, combined with increased marketing spending, will be a growth driver for the company.

The industry is growing in size, with most of the companies looking for store growth and increased marketing spending for growth opportunity. Panera Bread Co (NASDAQ:PNRA) has introduced a new pasta menu category to attract customers by promoting pasta as a dinner option. Jack in the Box Inc. (NASDAQ:JACK) is moving toward a franchise business model, which is more cost efficient and will improve the bottom line. I believe there is ample upside for these companies, given the strong trend they are seeing in the U.S. and their very limited international presence. Investors looking for high growth companies should consider these stocks for investments.

The article Catering Service And Increased Marketing Will Drive Growth For This Restaurant Company originally appeared on Fool.com is written by Ash Sharma.

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