We went to the Chipotle yesterday. This is my second visit (see my first visit exp here), and my wife’s first. It did not turn out to be a disaster, but it is obvious that my wife did not like Mexican food 🙁
On the other hand, the stock of Chipotle (NYSE: CMG) continued to do well in past 6 months, although they should have same “rising wheat and meat cost” issues as experienced by Panera, or (to a lesser extent), Starbucks. I think the main reason is, the consumers (black, white, Asian and hispanic) crave for the spicy Mexican food. Not the sandwich or latte from Panera or Starbucks.
If I could extrapolate this a little, consumer stocks are under pressure these days as the US consumers have one less ATM machine (a.k.a, sub-prime loans): this can be seen from the weakness of Discover Card to MasterCard, from Coach to NordStrom. But on the other hand, as I have seen in China, US fast food companies such as Yum Brand (the parent company of KFC, Pizza Hut) are doing very well there, I have even seen a “Pizza Hut index” created by the people there, to measure the consumer affluence level. I remember my hometown Ningbo is the list.
So, at the end of the day, for consumer products companies and retailers, the key to sell something the customers really want/like/crave about…and keep come back.