Early on, Chipotle Mexican Grill positioned itself as a restaurant industry innovator. But it has spent the past few years struggling to recover from a string of food safety crises, as well as abandonment by its customers and a plunging stock price. For help, the chain is turning to quick-serve Taco Bell for CEO Brian Niccol, 43, to replace Chipotle's founder, Steve Ells, as CEO on March 5. Niccol is tasked with replicating his success transforming Taco Bell from a fast-food afterthought to a social media-savvy company with sleek new stores, clever new creations and the hugely popular Doritos Locos Tacos.
“His expertise in digital technologies, restaurant operations and branding make him a perfect fit for Chipotle as we seek to enhance our customer experience, drive sales growth and make our brand more relevant,” said Ells in a statement.
Ells started Chipotle in Denver in 1993, and helped position it at the forefront of fast-casual restaurants. Chains like Panera Bread and Five Guys grew popular as consumers sought the convenience of fast food but the quality of sit-down establishments.
Chipotle is at a “pivotal time in its history,” Niccol stated. Hr used gutsy marketing and unusual food creations, such as the Doritos tacos and Nacho Fries, to excite customers. He also took aim at Chipotle’s customers, starting a higher-end Cantina chain and launching a healthier Cantina menu at Taco Bell.
In 18 of the past 20 quarters, Taco Bell has reported flourishing sales at established U.S. restaurants − better than many of its rivals, including McDonald’s Corp. and Chipotle, said Maxim Group analyst Stephen Anderson. It also outpaced Yum Brands' chains Pizza Hut and KFC in same-store sales for 2016 and 2017.
Having more than 2,400 restaurants, Chipotle was hobbled in 2015 by case after case of food contamination involving E. coli, salmonella and norovirus. Last year, the company was the target of hackers, excoriated on social media after a video of rodents in one of its restaurants went viral and saw its stock pummeled 63 percent. Ells’s co-chief executive, Montgomery F. Moran, gave up his position in 2016, and Ells has been criticized for his hefty compensation.
Ells said in November he would step aside after failing for two years to rescue the burrito chain’s sales and reputation, and told investors recently he would not get in the way of a new CEO.