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Chipotle Mexican Grill Will Launch First Digital-Only Restaurant

Chipotle Mexican Grill will open its first digital-only restaurant later this week to further grow its digital sales.

Chipotle Mexican Grill  (CMG) - Get Chipotle Mexican Grill, Inc. Report is set to open its first digital-only store, in New York State, as the burrito chain's digital sales surge during the pandemic.

From Nov. 14, the outlet, in Highland Falls, N.Y., an hour north of Manhattan, will be open only for pickup and delivery, the company said.

Shares of the chain were up 1.2% to $1,258 at last check.

The Newport Beach, Calif., company said the concept aims to speed the digital business in nontraditional locations. 

Chipotle's digital kitchen does not include a dining room or front-service line. Customers must order in advance via the website, app or third-party delivery partners.

The new format will enable Chipotle to enter more urban areas that wouldn't support a full-size restaurant and gives it more flexibility with future locations. 

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"The Digital Kitchen incorporates innovative features that will complement our rapidly growing digital business while delivering a convenient and frictionless experience for our guests," said Chief Technology Officer Curt Garner. 

For the third quarter Chipotle in late October had reported digital sales tripled year over year to $776.4 million. That represented 48.8% of total sales.

About half the digital sales were via delivery, Chipotle said, with the rest coming from order-ahead transactions. 

"With digital sales tripling year over year last quarter, consumers are demanding more digital access than ever before," Garner added.

Brian Niccol, chief executive at Chipotle, had told Bloomberg in October that "if a digital-only restaurant can cut opening costs in half because now you need a lot less of a footprint and you can still do a million dollars of sales through your digital business, it opens the door to do that now."

After Chipotle's earnings report Jim Cramer had said that this is an opportunity for investors to buy the stock right here, adding that Chipotle had a “near-flawless quarter.”