Chipotle Using Free Food To Draw In Customers

Chipotle Mexican Grill Inc. (NYSE:CMG) is hoping that the allure of free food will bring customers back into its stores. The chain has given away millions of free burritos so far this year. From February to May, the company gave away roughly $70 million in free-food coupons.

The company launched a loyalty program called Chiptopia in June that lets customers earn free meals based on the number of visits they make each month. Chiptopia offers free catering, merchandise, and a year’s worth of free burritos to participants that hit certain purchase goals. The program was initially successful in driving traffic, but executives have noted that participation has tapered off in the past few weeks. The loyalty program is slated to run for three months.

Chipotle is now offering free kid’s meals on Sundays during the month of September. Kids can eat free provided they order with an adult who purchases one regular-priced entrée. Limited edition activity sheets from the children’s book Dragons Love Tacos will accompany each kid’s meal. The offer applies only to children ages 12 and under.

Chipotle spokesperson Chris Arnold says many parents consider Chipotle a solid choice for children “because they can pick and choose exactly what their kids want.” The Chipotle kid’s meals include burritos, tacos, quesadillas and salads. The free kid’s meal transactions will count toward Chiptopia’s rewards program.

The company has also announced program that allows high school and college students to get a free soda or iced tea if they buy a meal and show ID. A Chipotle spokesman said, “It’s back to school time and students — particularly high school and college students — have always been such loyal customers, so we thought a promotion directed specifically to them would be a great way to help them ring in a new school year.”

These are yet more attempts to lure back customers spooked by a series of food scares. An E. coli outbreak that affected locations in 14 states last year sent Chipotle sales numbers and stock price plunging. The chain has been hit with numerous lawsuits over the outbreaks. Lawsuits have also been filed over wage fraud and discrimination.

The casual dining chain is trying to boost sluggish sales and foot traffic in its restaurants. Chipotle’s same-store sales plunged nearly 30 percent in the first quarter. It was its first quarterly loss as a public company. Same-store sales declined 26.5 percent in the second quarter.