When we last checked in with McDonald’s and Chipotle, both were outpacing their category peers and introducing new initiatives to help drive foot traffic and sales. With 2022 in the rearview, we dove into the quarterly performance of both chains and consider what might lie ahead for them in 2023.
Visits On the Up and Up
McDonald’s and Chipotle enjoyed impressive foot traffic growth all months analyzed. Much of this success is tied to the expansion both chains have undergone – Chipotle has grown from around 2,500 stores in 2019 to nearly 3,100 in 2022, and plans on opening an additional 250 locations in 2023. And McDonald’s, which is experiencing impressive sales growth, is leaning into automation for its planned expansion.
The strength of these brands is even more impressive when compared to the recent performance of the wider QSR and fast casual dining categories. Consumers are increasingly conscious of how they spend their money, with many choosing to dine out less frequently than they previously may have – and restaurants are feeling the effects of these decisions.
The QSR segment was down 11.1% and 10.4% in Q3 and Q4 2022 compared to the equivalent quarters in 2019. Meanwhile, McDonald’s – undisputed QSR leader – saw its visits elevated by 13.3% and 26.2%, respectively, for the same period. Chipotle, too, saw outperformance, with its visits exceeding the fast-casual segment in a year-over-three-year (Yo3Y, 2022 vs 2019) comparison. Visits to Chipotle grew by 66.2% and 28.7% in Q3 and Q4 2022 compared to the same quarters in 2019, while the fast-casual category saw its visits shrink by 18.9% and 27.2% in the same period.
Industry Leaders Cementing Their Roles
Year-over-year (YoY, 2022 vs 2021) foot traffic trends only strengthened these chains' position as industry leaders. As QSR-wide visit patterns remain subdued, McDonald's' growth remained noteworthy, with Q4 visits to the chain up 29.4% YoY compared to the 0.6% dip for the QSR category. The company’s growth relative to its wider segment may be partially due to the post-COVID effect – many dining chains rightsized or shuttered locations over the pandemic, leaving giants like McDonald’s to benefit from the reduced competition and market consolidation.
Chipotle also continued outperforming the fast-casual segment on a YoY basis while exceeding its own 2021 foot traffic in nearly all quarters of the year – and the California-based company is leaning into innovation to continue building its strength. Chipotle has invested heavily in Chipotlanes, or fully digital drive-thrus – of the 43 locations it opened in Q3 2022, 38 had Chipotlanes, positioning the company to continue catering to consumers looking for an omnichannel dining experience. Chipotle is also expanding into smaller markets, where audiences are highly responsive and overhead is lower.
Cross-Dining Increasing
Most notably, cross-dining data reveals that there is room at the top for multiple dining leaders. Between Q4 2019 and Q4 2022, the percentage of each chain’s diners that also visited the other chain increased – indicating that the success these companies are enjoying is not coming at the expense of the other.
McDonald's, boasting over 13,000 locations, unsurprisingly saw a larger share of Chipotle patrons visiting the chain than McDonald’s diners visiting Chipotle – in Q4 2019, 49.9% of Chipotle diners visited a McDonald's. By Q4 2022, however, that already significant share of cross-dining grew to 56.5%.
Chipotle also grew in popularity with McDonald's diners – 12.0% of McDonald's diners visited Chipotle in Q4 2022, compared to just 9.2% in Q4 2019. This increase suggests that Chipotle will continue to find receptive customers as it continues its expansion.
Looking Ahead to 2023
2022 was a challenging year for many dining establishments. However, McDonald’s and Chipotle closed out the year in a place of strength and seem poised to continue their growth into 2023. From leaning into digital innovations and automation, expanding in previously-underserved markets, and doubling down on drive-thru, both chains can hope to see continued visit growth in the new year.
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