• Chipotle introduced  new low-price-point menu items on December 23rd, such as the High Protein Cup of Adobo Chicken at $3.82 and a Single Chicken Taco at $3.50. The aim, in our view, is to address affordability perceptions and put something of substance on the menu for lighter eaters.
  • Traffic built leading into the launch; however, one week later, the enthusiasm waned. Moreover, the stronger period was matched by Taco Bell, which also enjoyed a favorable spurt. That suggests that Chipotle’s bump was more macro than micro. Since then, Chipotle’s slump has been worse, which may reflect the retail slowdown following the holidays.
  • Our early conclusion: the Protein Cup is a nice addition to Chipotle’s menu, but in the near-term, its primary issue is lost engagement due to tradedown to QSR, convenience, and at-home consumption.