Chipotle launches rewards program to bring back customers

(Reuters) - Burrito chain Chipotle Mexican Grill Inc CMG.N said it will launch a limited-period loyalty program, betting on a strategy it had previously shunned, to lure back customers after a string of food safety lapses last year.

Chipotle Mexican Grill is seen in uptown Washington, February 8, 2016. REUTERS/Carlos Barria

The three-month long program, called ‘Chiptopia’, is part of the company’s plan to create its first-ever permanent loyalty program.

“We created Chiptopia to reward our most loyal customers,” Mark Crumpacker, chief creative and development officer at Chipotle, said on Monday.

“While Chiptopia Summer Rewards lasts just three months, we will be carefully listening to our customers and using what we learn as we consider the design of an ongoing rewards program.”

The company will roll out ‘Chiptopia’ on July 1.

Unlike typical loyalty programs, ‘Chiptopia’ rewards customers for making multiple paid visits within a month rather than on the total amount spent, or by accumulating points.

Chipotle has been doling out freebies including chips and guacamole as well as buy-one-get-one burritos to bring back customers after a food safety crisis, which included outbreaks of E. coli, salmonella and norovirus, scared diners and led to the company’s first-ever quarterly loss.

Since then, the company has been embracing strategies it previously avoided such as reward programs, which Chipotle once viewed as unnecessary discounts for frequent customers.

Chipotle shares were down 1.4 percent at $395.08 in afternoon trading in a weak market.

The stock has lost more than a third of its value through Friday since October when news of an E. coli outbreak at its outlets first surfaced.

Reporting by Siddharth Cavale in Bengaluru; Editing by Sriraj Kalluvila