Dive Brief:

• December was one of Chipotle’s best months in the past two years for hourly and salaried employee turnover rates, CEO Brian Niccol said Tuesday during the company’s Q4 2022 earnings call. 
• Staffing levels improved last year, and 90% of its restaurants are now fully staffed, he said. 
• The company has been deploying its “Project Square One” to build a foundation to “reestablish operational standards … while continuing to build a culture of excellence in every aspect of our business,” Niccol said. 

Dive Insight:

Project Square One has meant making sure ingredients are in stock, that teams are fully staffed and deployed during peak times and food is prepared and cooked on time, Niccol said. At the same time, the company is working to improve frontline throughput and accuracy and timing at its digital makeline. Much of this has come down to more in-person training instead of relying on virtual training as it has in the past. Instead it’s bringing new employees into the restaurants sooner for more in-person training, Niccol said. 

“This helps to accelerate onboarding and gives more confidence to our new crew members as they are learning by doing,” Niccol said. “Shoulder-to-shoulder training by experienced managers is an essential process.”

Last year, Chipotle promoted over 22,000 employees and 90% of restaurant management roles were internal promotions, Niccol said. The company expects to open anywhere from 255 to 285 new restaurants this year, which could involve promoting over 1,700 hourly manager roles, over 255 general managers and over 40 field leadership positions. This level of elevation could increase as the company targets annual unit growth of 8% to 10%, Niccol said. The company previously said it plans to hire 15,000 employees by spring as it works toward its goal of operating 7,000 restaurants. 

“In addition to career advancement opportunities, industry-leading benefits and competitive wages, we will continue to look for ways to improve the overall experience for our teams,” Niccol said.

To do so, the company is using technology and is currently testing a new grill that can improve the cooking process for steak and chicken. The new grill, which is faster and more consistent, can lower the learning curve, Niccol said, adding that the grills will improve food quality. The company is also testing an automated digital makeline through its partnership with Hyphen that will improve accuracy and speed for digital orders. 

Having restaurants properly staffed is also contributing to improved traffic that the company saw in January. Traffic is improving alongside fewer menu deactivations, which occurred on its digital side when items were out of stock, keeping both frontline and digital makelines open during operating hours and deploying teams properly, Niccol said. The company expects throughput to really improve during Q2 as it brings on more people and heads into its busy burrito season, he said. 

“If you[‘ve] got more stability, your teams are deployed correctly, they are trained correctly, and then we keep it very focused on the basics of running the restaurant, we know we get good outcomes,” Niccol said.