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Where Are The Burrito Lovers?

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Summary: Chipotle's falling sales, and E.coli troubles coincide with an overall dip in Tex-Mex spending while Taco Bell makes some surprising gains. Read on for more surprising insights from our consumer panel's spending data.

It wasn’t long ago that Chipotle was hailed as the Tex-Mex darling of America, and for good reason: reasonable costs, fresh flavors (that guac!), the quasi-industrial ambience, and the infinitely patient staff (“Extra rice please!”) made Chipotle the perfect choice for burrito lovers. So when news of the E. coli outbreak hit last year, it came as something of a surprise.

Chipotle responded quickly: affected restaurants were quickly shuttered, a new commitment to transparency in supply chains was announced, DNA-based testing for fresh produce was introduced. But consumers are no longer lining up as they did in the glory days.

Where are the Chipotle lovers? Have they found burrito love elsewhere?
Turns out: "It’s complicated.”

Tex-Mex Fast Casual On The Decline

We analyzed data from a panel of consumers who made purchases at Chipotle and its largest competitors: Taco Bell, Qdoba Mexican Grill, Moe’s Southwest Grill, Del Taco, Taco Cabana, and Taco Bueno.

In fact, Chipotle’s health scare appears to have put a damper on Tex-Mex fast dining:

Total spend per restaurant

Customer spending declined at Taco Bell, Chipotle's closest competitor, and other restaurants saw no significant rise in spending even as the total amount spent at Chipotle fell drastically. Overall, Tex-Mex spending seems to have taken quite a hit.

So, has Chipotle been dethroned as Tex-Mex king?
In a word: No.

Chipotle and Taco Bell Compete For Wallet Share

Wallet share - percent of total amount spent on Tex-Mex fast dining - paints an altogether different picture:

Not surprisingly, Chipotle's wallet share fell in the immediate aftermath of the outbreak. Interestingly, Taco Bell seemed to claim most of that spending, increasing its share of wallet from 25% to 31%.

Tex-Mex Fast Casual Wallet Share

However, post-outbreak, Chipotle has rebounded to 46% of the total Tex-Mex spending, and continues to climb. Meanwhile, Taco Bell scrambles to retain the “Chipotle defectors”.

Chipotle’s renewed commitment to food safety seems to be the salve that’s needed to bring back the defectors. A new marketing strategy to affirm this commitment could be just the ticket.

Taco Bell, on the other hand, might have a chance at retaining these customers with a major marketing focus on its food safety measures and its fresh ingredients (remember these full page ads?).

Conclusion: A break is not always a breakup - Chipotle continues to reign as America’s Tex-Mex sweetheart.

Related: Are millennials really abandoning fast food?

Learn more about consumer spending analytics with TXN.

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