Chipotle Mexican Grill’s new CEO Brian Niccol is wasting no time trying to get the burrito chain back on track.
On a conference call with investors and Wall Street analysts late Wednesday, Niccol laid out his plan to win back customers who defected in the last two years in the wake of food safety problems as well as boredom with the brand.
Niccol, who became Chipotle’s chief this winter after a successful stint heading Yum Brands’ (YUM) Taco Bell, said Chipotle (CMG) would close between 55 and 65 stores—out of a fleet of 2,400 globally.
As for Chipotle’s food, he is borrowing some of his own moves from his time at Taco Bell, where he revived the chain by introducing new food items.
For instance, Chipotle will introduce more snack items as well as a “happy hour” deal between 2 p.m. And 5 p.m., selling $2 tacos with beer and margaritas, with a similar offering for later in the evening. The idea there is to generate more business outside of peak eating times. While it is closing a few dozen stores, Chipotle is planning to extend business hours at many others.
“We will make the brand more culturally relevant,” Niccol told investors.
Shareholders have bet heavily that Niccol can turn around a company that had been Wall Street’s darling thanks to its focus on fresh ingredients, until the food safety crises of late 2015 sent sales plummeting for a number of quarters and customers proved reluctant to return.
But shares fell 3% as Niccol laid out his plan, showing Chipotle will remain a show-me story. Chipotle is also moving its headquarters to Newport Beach, Calif. From Denver. The costs associated with that move and store closures are part of a $115 million to $135 million charge Chipotle forecasted.
In his first four months at the helm, he has shaken up the C-suite, hiring new chief marketing officer, among other changes.
Chipotle’s plan also includes trying out items like quesadillas and chocolate shakes. Chipotle will launch a customer-loyalty program nationally in 2019 and give a bigger push to digital ordering so customers can place orders before they get to the restaurant and get faster service. The company will also test a new layout for its restaurants.