What Would Be The Revenue Growth If Chipotle Adds 100 Stores In Europe?

by Trefis Team
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Trefis estimates that Chipotle (NYSE: CMG) can add incremental revenue worth 3% of the Total by the year 2024 if they add 100 stores in Europe by then. The revenue is likely to be slower in the first 2-3 years as the brand is not yet well known in the region due to its negligible presence. We will discuss this below in detail. You can view our interactive dashboard analysis – What Would Be The Revenue Growth If Chipotle Adds 100 Stores In Europe Within The Next 5 Years? for more details on the company’s expected performance. In addition, here is more Consumer Discretionary data.


How have American Fast Food Chains’ Revenues grown in Europe?

  • The fast food market has been rising in Europe as evidenced by the continuous increase in sales revenue of American chains like McDonald’s, KFC, Pizza Hut, and Taco Bell.
  • McDonald’s has one of the highest reaches in the continent and recorded a system-wide revenue of about $25 billion in 2018. The system-wide sales revenue has grown around 9% in the last 2 years.
  • KFC’s system-wide sales revenue has grown from around $2 billion in 2015 to around $2.9 billion in 2018. It grew at a CAGR of 13%.
  • Pizza Hut’s system-wide sales revenue has grown from around $0.7 billion in 2015 to around $1.2 billion in 2018. It grew at a CAGR of 19%.
  • Taco Bell has seen the highest growth among all the chains with system-wide sales revenue rising from around $21.4 million in 2015 to 132.7 million in 2018.


How has Chipotle grown over the years?

  • Chipotle has been showing high revenue growth after the fall due to the E. coli virus in 2016. Revenue has grown from $3.9 billion in 2016 to $4.9 billion in 2018 at a CAGR of 11.6%.
  • The growth has been fueled by continuous additions of restaurants and an increase in the average revenue per restaurant over the years.
  • Average Number of restaurants increased from 2,130 in 2016 to 2,450 in 2018 at a CAGR of 7.3%.
  • Average revenue per restaurant increased from $1.8 million to $2 million at a CAGR of 5.4%.

Forecasting Chipotle’s Europe Revenue through 2024 if they reach an average of 100 restaurants:

  • Chipotle has negligible presence outside the United States. Out of 2,491 restaurants operating as of 31st December 2018 only 37 restaurants are outside the United States. (23 in Canada, 7 in United Kingdom, 6 in France, and 1 in Germany)
  • Trefis estimates, due to Chipotle’s negligible presence and considering a continuous increase in fast food consumption in Europe, it can potentially be a high growth market for the company.

The risks that Chipotle might face in the first few years are:

  • Revenue per restaurant would not be as high as its US counterparts as the brand would be quite new in the region.
  • As the brand is relatively new the advertising and promotion cost would also be higher than what Chipotle would need in the United States.


Below, Trefis has estimated revenue that Chipotle can gain from Europe if by 2024 it reaches an average of 100 restaurants in the continent.


If by 2024 Chipotle reaches an average of 100 restaurants in Europe, the revenue contribution from it would still be less than 3% of the Total due to the substantially high presence in the US.  Trefis estimates that if Chipotle can generate this foothold in Europe by 2024, then the potential to grow in that market could be high.



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