Last Updated on April 20, 2023 by stlplace
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 on 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.