How it contributes to the comp. Here’s one thing I’ll tell you is we’re executing better. And when we’re executing better, people feel better about the food, they feel better about the brand. We just got back some brand metrics that frankly are just terrific. And I think that shows up in our value scores. And then it shows up in the way that people are feeling about the brand. So the brand has got really strong perceptions. I think our team members feel really good about the success they’re having, which is also really important, right? When the crew feels like they’re going fast or giving people what they want, they feel better. Which then I think in result turns into like kind of this ongoing system where everybody believes they’re now achieving and getting what they want.
So our customers are happier, the team members are happier, the brand is stronger. And I think these are all the things that contribute to seven points of transaction growth or said it another way really strong value proposition that we’ve gotten in today’s environment.
Sara Senatore: Got it, okay, thank you. And then just on the Carne Asada, I mean, I know in the past you’ve gotten questions about how do you lap a really successful LTO, but here you have it for like the third time and it was better than you expected. Is that marketing, is that digital? Because you actually, as a percentage of revenue, spent less year-over-year. So I’m just trying to understand, again, what the runway is for these already very successful LTOs.
Brian Niccol: Yes, look, I think our teams executed Carne Asada, better than we ever have. I thought the experience of Carne Asada was terrific. I also do think the advertising and the communication around it was really good. So I think our ads are communicating what makes Chipotle special, which is this team member that’s committed to doing great culinary in the restaurant. And then when you layer in a great product like Carne Asada that gets executed with excellence, good things happen. And, it was kind of, I think Jack mentioned this earlier, great demand generation with the advertising and the Carne Asada initiative. And then the folks in our restaurants were doing a really terrific execution so that people got down the line faster, they experienced great culinary and they got exactly what they wanted. So I think it’s the combination of really having compelling menu news with great advertising and our operations team executing the fundamentals really well.
Operator: The next question comes from Danilo Gargiulo with Bernstein.
Danilo Gargiulo: Thank you. Can you please provide maybe some color on the key drivers of the traffic comp being procured by income cohort or maybe by channels? And if you can also comment on the average check, how much was the contribution from pricing versus contribution from mix and what’s your expectation given that the delivery mix impact should be normalizing at this point?
Brian Niccol: Yes. So, look, one of the things that we’re really delighted to see is every income cohort we saw sales grow. So whether that’s below 40, 000, between 40, 000 and 100, 000, over 100, 000, we saw progress with every income cohort. So, clearly, the brand is resonating in a meaningful way. What was the other part of this question?
Jack Hartung: The channels and in-store with by far strongest channel which supports the throughput that we saw.
Brian Niccol: Yes. In-store was the strongest. Order ahead was next and then delivery was third. And I think Jack was just mentioning this. The in-store experience, when we have the culinary ready to go and you go down the line, it’s tough to beat. I mean, there’s no better experience than walking down the line, seeing the rice and chicken that you want and then giving one of our team members the look like, how about a little more when they do it? So, I tell you, end up with these big bowls and big burritos. And so, I think the value proposition is just really strong in store, especially when we’re executing great culinary and great speed.
Jack Hartung: And then, Danilo, just on the check, the check impact was a 1%, plus 1%. That’s about 2.5% price offset by about 1.5 on the mix and the mix is driven by group size.
Danilo Gargiulo: Got it, thank you. And then you recently significantly improved the benefits and you really are offering a very strong employment value proposition to your employees. Can you talk about the labor cost and maybe productivity improvement implications that you’re expecting from that initiative? And it would be great if you can maybe frame where you are in turnover levels today relative to the rest of the competition in the fast-casual industry?
Brian Niccol: Yes, look, I appreciate you taking notice. It’s really important to us to make sure that we surround our employees with the right pay, the right growth opportunities and the right benefits. And I do think some of the things that we’ve added, like being able to help people or incentivize people to pay off student loans and then match them with a 401-K contribution, I think is a really good idea for the generation of people that we are hiring, the Gen Zs. And also the growth opportunity. Folks can join our company in crew and in three, four years, quickly find themselves leading one team and in some cases, being a multi-unit leader. So I just had the opportunity to meet a young lady. I think she was like 24 field leaders, newly promoted.
She was at one of our cultivated university sessions and the young lady’s very ambitious. I guarantee she’ll be a TD the next time I see her. So I’m excited to have these growth opportunities for people surrounding them with great benefits and I think a great culture. How does that play out in stability? We’re seeing some of the best stability we’ve seen, frankly, in my time at Chipotle. If you go back and look, the fact that we’ve got General Manager turnover in the low 20s, crew turnover kind of in the low 100s, that’s really good. And relative to the industry, I think that’s ahead of the industry, but I don’t know those numbers for sure. But what I do know is we’re getting more stability; we’re seeing less turnover. And what we hear back from people is they love the purpose; they love the culture and they love the growth opportunity.
And that’s what we’re going to continue to provide people.
Operator: The next question comes from John Tower with Citigroup.
John Tower: Great, thanks for taking the question. I’m just trying, you mentioned earlier, the idea that the suggestive selling is starting to work pretty well within the app in terms of getting some incremental attach for orders. But I’m curious if you’re doing anything within the stores coaching people up to kind of work that as well, especially it looks like your digital sales mix, while not slowing remarkably is coming down quite a bit. So thinking about kind of the check growth from this point forward, are there means for you to be able to encourage greater attach for consumers in the store? Is there anything you’re doing now?
Brian Niccol: Look, I think in the restaurant, just the simple fact that I think our teams are doing a much better job of having chips and queso and guac all the way until close is making a big impact. I think we talked about this six, nine months ago. We weren’t as good as we should have been call it after six, seven o ‘clock at night with being ready to go with chips or guac and queso. And now we are. And our teams are very aware that they should be ready to go with those side items. And I think as a result, you’re seeing more people attach them. We aren’t doing anything out of the ordinary other than making sure we’ve got great product ready to go. And when people know it’s there, they order it. And when our crew knows they have it, they’re more willing to say, hey, do you need chips with this order?
if it’s seven o ‘clock, eight o ‘clock at night, and you don’t have chips, you usually don’t say to somebody, do you need chips with that? When you do, it comes pretty natural in the conversation to say, hey, do you need chips to go with that, or do you need a queso to go with that? So it’s really been more focused on executing great culinary available from open to close.
John Tower: Got it. And then just, further the delivery a little bit. It looks like that might be moving lower as a percentage of sales as well. And I’m just curious if from your perspective, you’re getting any indication from those consumers that this is the way that they’re better managing their own spend at the store, effectively trading that higher cost channel for a lower cost channel going directly to you. And actually, could you provide the delivery mix as well?
Brian Niccol: Yes, look, I think intuitively, I think the answer is yes, right? If you’re tighter on money, the most expensive way to experience Chipotle is through delivery. So I think consumers know that and they manage accordingly. But I will say that delivery channels have been pretty stable for the most part. It’s in that 14%, 15% range for marketplace and then like 4% or 5% for white label. So you get like 20% delivery. But it’s been pretty stable. And at the end of the day, though, if you need to manage your money, yes, delivery is the most expensive access point.
Jack Hartung: The one thing, Brian, we have is Chipotlane. Chipotlane is one example where when you offer the convenience of Chipotlane and then the value that Chipotlane and the customization that Chipotle, you normally would expect to get. You do see that the delivery will drop like 10 points. So it’ll drop to the low, call it 10%, 12% something like that, several to 10 points. And then our order ahead and pick up will move open at high 20s. So to us that’s a clear indication that if we offer extreme convenience along with the value that you Chipotle have that people will choose that access channel as opposed to delivery.
