The pricing comparisons to Chipotle are based on stores in the same trade areas. It’s probably worth noting that Chipotle doesn’t include chips with burritos (like Moe's for instance). Some other quick points: Qdoba’s pricing structure offers queso and guacamole at no additional charge, unlike Chipotle. If you factored that in, the relative gap would be smaller or actually place Qdoba below that of Chipotle. However, as BTIG noted, not all customers add guacamole or queso and when weighting the additional cost by prevalence (Qdoba has previously said queso was included in nearly half of entrees), BTIG estimates that Qdoba would still be slightly higher than Chipotle.
Qdoba (versus Chipotle)
- Chicken burrito: 12.6 percent
- Steak burrito: 5.9 percent
- Carnitas burrito: 13.6 percent
- Veggie burrito: 8.1 percent
- Guacamole: 40.1 percent
- Chips & Salsa: –3.2 percent
- Large Drink: –1.1 percent
- Average: 10.9 percent
- Weighted average: 10.3 percent
Moe’s (versus Chipotle)
- Chicken burrito: 6.2 percent
- Steak burrito: 1.1 percent
- Carnitas burrito: 8.5 percent
- Veggie burrito: –3.3 percent
- Guacamole: 48.7 percent
- Moe's includes chips free of charge with orders
- Large Drink: 11.9 percent
- Average: 12.9 percent
- Weighted average: 7.2 percent
Baja Fresh (versus Chipotle)
- Chicken burrito: 10.6 percent
- Steak burrito: 4.8 percent
- Carnitas burrito: 8.8 percent
- Veggie burrito: 2.7 percent
- Guacamole: –9.1 percent
- Chips & Salsa: 39.4 percent
- Large Drink: 5.1 percent
- Average: 8.9 percent
- Weighted average: 7.5 percent
Average
- Chicken burrito: 9.8 percent
- Steak burrito: 4 percent
- Carnitas burrito: 10.3 percent
- Veggie burrito: 2.5 percent
- Guacamole: 26.6 percent
- Chips & Salsa: 18.1 percent
- Large Drink: 5.3 percent
- Average: 10.9 percent
- Weighted average: 8.3 percent
Here’s a look at the burrito pricing comparison by average cost by trade areas (why Chipotle’s price changes slightly):
Chicken
- Qdoba: $7.94
- Chipotle: $7.05
- Premium to Chipotle: 12.6 percent
- Moe’s: $7.51
- Chipotle: $7.08
- Premium to Chipotle: 6.2 percent
- Baja Fresh: $8.03
- Chipotle: $7.26
- Premium to Chipotle: 10.6 percent
Average premium: 9.8 percent
Steak
- Qdoba: $8.52
- Chipotle: $8.04
- Premium to Chipotle: 5.9 percent
- Moe’s: $8.16
- Chipotle: $8.07
- Premium to Chipotle: 1.1 percent
- Baja Fresh: $8.63
- Chipotle: $8.24
- Premium to Chipotle: 4.8 percent
Average premium: 4 percent
Carnitas (LTO at Chipotle)
- Qdoba: $8.52
- Chipotle: $7.50
- Premium to Chipotle: 13.6 percent
- Moe’s: $8.16
- Chipotle: $7.52
- Premium to Chipotle: 8.5 percent
- Baja Fresh: $8.38
- Chipotle: $7.70
- Premium to Chipotle: 8.8 percent
Average premium: 10.3 percent
Veggie
- Qdoba: $7.62
- Chipotle: $7.05
- Premium to Chipotle: 8.1 percent
- Moe’s: $6.85
- Chipotle: $7.08
- Premium to Chipotle: –3.3 percent
- Baja Fresh: $7.46
- Chipotle: $7.26
- Premium to Chipotle: 2.7 percent
Average premium: 2.5 percent
“Our sense is that while Chipotle has historically been underpriced relative to these competitors, the pricing gap has likely increased in recent years as other concepts have taken more consistent price increases,” Saleh wrote.
It’s also true that Chipotle, historically, has taken larger, but less frequent price increases than its competitors. It’s kind of the rip-off-the-pricing Band-Aid model. And like the January result showed, Chipotle’s food safety woes likely kept it from raising prices as it recovered. It was facing enough traffic concerns without adding pricing into the mix.
Let’s take a deeper look at the side-item pricing comparison:
Guacamole
- Qdoba: $2.97
- Chipotle: $2.12
- Premium to Chipotle: 40.1 percent
- Moe’s: $3.15
- Chipotle: $2.12
- Premium to Chipotle: 48.7 percent
- Baja Fresh: $2.08
- Chipotle: $2.28
- Premium to Chipotle: –9.1 percent
Average premium: 26.6 percent
Chips & Salsa
- Qdoba: $2.04
- Chipotle: $2.11
- Premium to Chipotle: –3.2 percent
- Baja Fresh: $3.07
- Chipotle: $2.20
- Premium to Chipotle: 39.4 percent
- Moe's (free with orders)
Average premium: 17.9 percent
Large Fountain Drink
- Qdoba: $2.23
- Chipotle: $2.26
- Premium to Chipotle: –1.1 percent
- Moe’s: $2.50
- Chipotle: $2.24
- Premium to Chipotle: 11.9 percent
- Baja Fresh: $2.46
- Chipotle: $2.34
- Premium to Chipotle: 39.4 percent
Average premium: 5.1 percent
Returning to the topic of emerging competitors, BTIG said it often receives comments about Chipotle facing competition from other fast casuals as much as its Mexican peers. Investors typically cite concepts like Chopt, Just Salad, sweetgreen, Dig Inn, and B.Good, BTIG said, as being market-share threats to Chipotle’s business, especially around the lunch daypart.
“While not discounting the competition these concepts present in selected markets, we would first make two points,” Saleh wrote. “All of them are still relatively small [B.Good has 60 units, Chopt has 56, Just Salad has 28, Dig Inn has 25] compared to Chipotle [2,424 units] and they are heavily concentrated in major cities like New York, Boston, and San Francisco.”
“We believe this dynamic can skew investor’s perspective of how prevalent they actually are, noting outside of major cities fast casual competition becomes sparser,” he added.
Here’s a comparison from New York results:
- Chipotle’s Chicken Bowl: $8.95
- Chopt’s Crispy Chicken Ranch Salad: $10.99
- Sweetgreen’s Chicken and Brussels Salad: $12.95
- Dig Inn’s Charred Chicken Market Plate: $11.02
That represents, respectively, premiums of 22.8 percent, 44.7 percent, and 23.1 percent to Chipotle.
When you tack on guacamole for $2.45, Chipotle ups to $11.40. Add avocado at Chopt for $1.99 and it’s now $12.98 (still a 13.9 percent premium). Do the same at Dig Inn for $1.84 to $12.86 and the premium falls to 12.8 percent.
“Our takeaway would be similar to the Mexican comparison—that Chipotle is underpriced relative to these peers and offers a compelling value. While these newer concepts certainly offer customers variety, they do so at a premium and Chipotle still has relative pricing power,” Saleh wrote.