For the past 18 months, Chipotle has been slowly recovering from an E.coli outbreak in its restaurants in November 2015:
Now, it's been hit by food poisoning news again: two weeks ago multiple customers of the Sterling, VA location suffered symptoms of Norovirus after visiting the restaurant.
If customers ditch Chipotle again, who is likely to benefit? The most likely competitors to benefit from a Chipotle defection are restaurants already frequented by Chiptole customers. In our panel of over 3 million credit and debit cards, here are quick-serve restaurants with the largest proportion of customers who also shop at Chipotle:
This list is far from limited to the "fast casual Mexican" category; it also contains sandwich shops and "Chipotle for X" chains like CAVA (Mediterranean) and Pei Wei (Asian).
Looking at the number of average transactions per customer, Chipotle has had a much more loyal and consistent customer base than its competitors, even in the midst of their outbreak issues:
That said, their competitors can hope to generate a lot of additional business if customers become convinced Chipotle's food is unsafe.
Next, let's take a look at what Chipotle diners spend elsewhere, i.e. how much do Chipotle diners spend vs. the average guest at each of Chipotle's competitors:
Interestingly, we see that for all of the competitors except Which Wich and Baja Fresh, the customer who also eats at Chipotle is more valuable than the average customer. Since Chipotle customers are big spenders elsewhere, one possibility is that these other restaurants would see their own spending increase if big-spending Chipotle customers were to defect.
In short, multiple companies are poised to benefit from a possible consumer backlash against Chipotle, some even replicating Chipotle's own "production line for fast casual restaurants" model with other cuisines. Whether Chipotle can convince its customers it can improve on food safety - only time will tell.
Learn more about consumer spending analytics with TXN.