As restaurants weigh consumers’ desire for customizable options with their demand for quick, easy meals, Chipotle has found that the build-it-yourself model that has fueled its success does not work for all types of foods.
Chipotle-financed chain Pizzeria Locale shuttered its five locations and shut down the business Monday (July 10), per the burrito chain’s decision.
“We have made the decision to close all five Pizzeria Locale restaurants on July 10 and dissolve the business,” Chipotle told PYMNTS in a statement. “Impacted employees have been extended employment opportunities at Chipotle restaurants in the Denver area.”
Chipotle declined to comment on the reason for the brand’s closure. However, it seems that the fast-casual model may not work as well for pizza, which consumers often choose when they are looking for quick, simple options, as it does for burritos or — as Mediterranean build-it-yourself chain Cava’s blockbuster IPO suggests — for pita wraps.
The fast-casual pizza brand, which Chipotle first invested in a decade ago, enabled consumers to either build their own pies or order from preset menu options, yet consumers may prefer a lower-priced, quicker-to-receive pizza. After all, quick-service restaurant (QSR) pizza brands such as Domino’s and Pizza Hut continue to see same-store and systemwide sales growth.
Pizza tends to be the first restaurant category to make the shift when more convenience- or efficiency-focused technologies are developed. Take, for instance, the autonomous pizza kiosks and shops that have appeared around the world, as well as the robotic delivery tests that major brands have undertaken.
Indeed, not all restaurant categories lend themselves equally well to the fast-casual service mode. IHOP shut down its fast-casual concept Flip’d in June, suggesting the mode does not fit the breakfast occasion.
Convenience is a top-of-mind concern for many restaurant customers. For instance, research from PYMNTS’ study last year, “Digital Divide: The Key Factors That Drive Restaurant Choice,” found that nearly 47% of all consumers consider it important that a restaurant have convenient pickup options when deciding where to order.
Plus, fast-casual chains tend to be pricier than QSRs, and today’s consumers are not often willing to spend extra money on a quality upgrade.
Research from PYMNTS’ “Connected Dining: Consumers Like the Taste of Discount Meals” found that 43% of consumers who had paid a reduced price on their most recent restaurant purchase and 37% of consumers who did not receive a discount reported that price was a key factor influencing their most recent choice of restaurant.
Chipotle, for its part, is not ready to quit its restaurant efforts outside the burrito space. Rather, the company continues to try out new concepts. Earlier this year, for instance, the fast-casual giant announced the launch of its Farmesa brand, which offers customizable bowls with a variety of proteins, grains and vegetables.
“With Farmesa, we are tapping into the fresh eatery food trend that is in demand among Chipotle’s target demographic, Gen Z and millennials,” Chipotle’s Nate Lawton told PYMNTS in an interview in March.