By Zanub Saeed
As Chipotle Mexican Grill's stock prices dropped on Friday, insiders are saying that the reason isn't necessarily that the franchise isn't providing to consumers, but that customers are being more cautious with their money in these economically-stressful times, said Reuters.
Chipotle was shown to have its stock dropped by nearly 23 percent on Friday, which made it the biggest percentage loser at the New York Stock Exchange, said Reuters, though the company admitted that their older stores, those that have been opened for at least 13 months, are up by eight percent in second-quarter sales, noted Reuters. It was expected to rise by 10 percent, analysts predicted, so it was a disappointment in that respect.
Chipotle said the reason of the decline in sales came from "a general slowing of the economy and reduced consumer spending" and forecast low-to-mid single-digit same-restaurant sales growth for the remainder of the year," they told Reuters this week.
"The market in general slowed. It's a squeezed consumer," restaurant consultant Malcolm Knapp told Reuters. "There's nothing wrong with Chipotle."
"We continue to worry about slower growth in the second half of 2012 (in the absence of) additional menu pricing, acceleration in multiyear traffic trends, or a positive margin surprise," BMO Capital Markets analyst Phillip Juhan told Reuters in a note.
Overall investors and consultants do not see the reason for the drop being because of Chipotle overall, though given that other companies have added menu items to lure consumers while Chipotle hasn't, that might be partly a contributing factor.
