It seems that Chipotle Mexican Grill, Inc. CMG is betting big on its Southeast Asian chain of restaurants – ShopHouse Southeast Asian Kitchen. ShopHouse Southeast Asian Kitchen is reportedly entering the Chicago market with two units in Loop and Schaumburg set to be opened on Nov 13 and Dec 8, respectively. While the Schaumburg outlet is at 1022 N. Meacham Road, the other one is at 24 E. Jackson Blvd. in the Loop.
Currently, the concept operates 11 shops at California, Maryland and Washington, D.C., and primarily serves Malaysian, Singaporean, Thai and Vietnamese cuisine. Offering a completely gluten-free, dairy-free and wheat-free menu along with many vegan and non-GMO options, the concept has gained immense popularity among health-conscious diners.
With increasing health consciousness, Americans are gradually refraining from food with higher calories, fat and sugars. Therefore, restaurants are changing their menu to focus on “good for you” products.
In fact, Chipotle is one of the most recognized fast casual Mexican restaurant chains in the country that boasts a viable business strategy. The company’s ‘Food with Integrity’ program, introduced in 2001, seeks to provide better food quality by using fresh ingredients and sustainably-grown and naturally-raised products such as pork, chicken and beef.
Such actions have helped the company to gain a loyal consumer base of health conscious consumers as the demand for natural and healthier food in the U.S. is constantly rising. Also, Chipotle has been witnessing a fairly stable traffic trend over the past few years driven by strong market position, menu launches and increased media exposure.
In fact, other restauranteurs are also catching up on this popularity for healthy food. While Panera Bread Co. PNRA plans to remove 150 artificial ingredients from its kitchens by 2017, McDonald's Corp. MCD will discontinue the use of chicken raised with antibiotics at its U.S. restaurants within the next two years. Noodles & Company NDLS has also laid out plans to eliminate artificial and unhealthy ingredients from its menu.
In our view, with the expansion of its Southeast Asian concept in Chicago, the company should be able to further boost comps.
Chipotle currently carries a Zacks Rank #3 (Hold).
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