Chipotle's Loyalty Base Reaches 20M: Will It Drive Sales Recovery?

Chipotle Mexican Grill, Inc. CMG has been witnessing a decline in comparable restaurant sales since the beginning of 2025, mainly due to lower customer transactions. In the first six months of 2025, the company’s comparable restaurant sales declined 2.3% against 9.1% growth in the year-ago period, mainly pressured by a 3.7% downtrend in transactions.

Although higher average checks and menu price increases are battling to keep the comps afloat, it is not proving to be sufficient. To counter this headwind and increase sales unit performance across all its restaurants, the company is engaging in several business initiatives, one of which includes enhancing its loyalty program. Launched in 2019, the Chipotle Rewards loyalty program has been scaling since then, with about 20 million loyalty members as of June 30, 2025.

CMG has been consistently enhancing and diversifying its loyalty program offerings to boost customer engagement and ramp up transactions. To add more people to its loyalty program, the company bolstered its enrollment campaigns and signage, both in restaurants and across the digital platform. It launched a three-month gamified experience with extra points, badges and prizes, named Summer of Extras, as its number of reward members reached milestones. The launch of the Summer of Extras promotion boosted customer engagement and increased transactions between June and July 2025, resulting in digital sign-ups growing 14% year over year. Besides this, for fall 2025, Chipotle has another program scheduled targeting the college population. It aims to keep engaging in sales boosting initiatives to increase customer engagement in its loyalty program and boost their frequency and spend year over year.

Loyalty program offerings, effectively amalgamated with operational efficiency, digital enhancements and marketing innovation, have the potential to boost sales trends and revenue growth in the long term.

Competitive Position of Chipotle

Loyalty programs are one of the most well-known marketing initiatives in the restaurant industry to boost customer engagement and sales trends. Chipotle faces substantial competition when it comes to offering a diversified and engaging loyalty program from key market players like McDonald’s Corporation MCD and Starbucks Corporation SBUX.

The loyalty program of McDonald’s, named MyMcDonald’s Rewards, has garnered more than 12 million sign-ups even before a national marketing push, since its launch in 2021. This boost stands on leveraging the global brand reach and app-exclusive deals, resulting in rapidly expanding engagement. With the increased digital adoption, McDonald’s is optimistic about its loyalty members’ growth trend, with the program already deployed in more than 60 markets, including the United States, Germany, Canada, the UK, Australia and France.

Notably, Starbucks’ loyalty program, Starbucks Rewards, offers tough competition to Chipotle with its nearly 34 million 90-day active U.S. members, driving nearly 60% of domestic transactions, offering a deeply personalized, app-driven ecosystem with payment, ordering and lifestyle perks. The enhanced digital perks are what drive Starbucks’ reward program among its customers. As of June 29, 2025, the U.S. ticket increased 2% as the company reduced discounted transactions by about one-third, reflecting stronger spend without heavy promotions.

CMG Stock’s Price Performance & Valuation Trend

Shares of this operator of quick-casual and fresh Mexican food restaurant chains have trended downward 15.7% in the past three months, underperforming the Zacks Retail - Restaurants industry, the broader Zacks Retail-Wholesale sector and the S&P 500 index.

Chipotle stock is currently trading at a premium compared with the industry peers, with a forward 12-month price-to-sales (P/S) ratio of 4.41, as evidenced by the chart below.

EPS Trend of CMG

For 2025 and 2026, CMG’s earnings estimates have remained unchanged over the past 60 days at $1.21 and $1.42 per share, respectively. However, the estimated figures reflect 8% and 17.6% year-over-year growth, respectively.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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