LOS ANGELES -- Chipotle Mexican Grill Inc. plans to focus on building smaller restaurants because they bring in more sales than larger units and cost less to operate, a senior executive said on Wednesday, according to a Reuters report.
After studying the performance of its Mexican-style restaurants, the fast-growing chain found the 1,000-sq.-ft. to 3,000-sq.-ft. units were outperforming their larger counterparts. And, they are cheaper to build, the company's president Montgomery Moran said.
"As the stores got smaller, the gross [image-nocss] sales got larger, and the returns got even larger still," Moran said during a presentation at the J.P. Morgan Gaming, Lodging & Restaurants Conference in Las Vegas. "We're going to try to drive that."
To help offset a spike in construction costs, Moran said Chipotle will shift more of its new restaurant development to mall locations rather than freestanding outlets. The chain currently operates 500 restaurants in the United States and plans to add 80 to 90 outlets in 2006.
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