I unabashedly love Chipotle, despite the fact (EDIT: because of the fact…) that I’m a white male raised middle-class in a major urban center. They have good food, it seems fresh, it comes pretty quickly, and they have cool marketing campaigns. Investors like it — I didn’t say love it — because its shares are up 1,120% since McDonald’s divested it in 2006. Here’s the one major thing to remember: in some cities, it can seem omnipresent, but it’s really not. At the end of 2013, there were about 1,600 Chipotle restaurants. That averages to 5.2 per 1 million Americans. By contrast, McDonald’s has 14,000 locations (Starbucks has about that as well), which equates to about 44 stores per 1 million people. Roughly, that means a place like Phoenix (4 million people, give or take) should have about 22 Chipotle restaurants and 176 McDonald’s restaurants (that’s a ratio of 8 to 1 or so, allowing for more money to flow into McDonald’s coffers, per se). It should probably be noted here that McDonald’s and Starbucks also have their own problems.
Alright, so keep that “5.2 per million” figure in mind for Chipotle, and look at this graph:
In DC, their number of restaurants is about five times their national average. In Colorado (logical, as the company was founded there), Ohio, Minnesota, Maryland, Arizona and Virginia, it’s almost twice the national average. Maryland Virginia make sense: a Chipotle in Bethesda might as well go under that “DC” metric slice, and a Chipotle in Arlington should too. Arizona makes sense as well: again, Phoenix has a buttload of people, Tucson’s a college town (college kids love burritos, amirite?), and there’s a good percentage of Mexican-American residents intermingled with white people making above-average wages. Ohio and Minnesota confuse me, though; Ohio less so, because it has a bunch of larger cities (Cincinnati, Cleveland, Columbus, Dayton, etc, etc.) and that can impact how many restaurants Chipotle is putting up, but Minnesota … weird. I have one in walking distance of me (yum) but beyond that, I feel I’d have to drive 20 minutes — and Minnesota really only has two remotely relevant urban areas (Twin Cities and Duluth). I’m surprised it’s that high but then again, wages are solid here, so “fast casual” can be a thing (and also, college kids love burritos, and UMN has tens of thousands of them).
By the way, because I know you were wondering … there are about 79 Chipotle locations in the greater Phoenix area (the 5.2 math would yield 22, as above).