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More ShopHouses from Chipotle in U.S

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Denver, CO-based Chipotle Mexican Grill Inc. (CMG) is set to launch new ShopHouse (Asian themed restaurants) units in premium states of the U.S. For this purpose, the company has entered into new lease agreements.

Under the terms of the deal, the company will be adding new restaurants in Westwood, CA, Bethesda and Rockville, MD and Washington, DC. The Westwood and Bethesda-based ShopHouse restaurants are due to be opened by the end of 2013 while Rockville and Washington, DC-based units will mark its opening in 2014.

Launched in 2011, the ShopHouse Southeast Asian Kitchen concept, is based on the traditional shophouses (two or three storied buildings with families living in the upper floors and running restaurants on the ground floor) located in Thailand, Malaysia and Vietnam.

Chipotle currently operates one ShopHouse unit in Washington, DC. The company plans to open three more ShopHouse restaurants in the Washington, D.C and Los Angeles markets within a few weeks. By focusing on this emerging opportunity, the company will be able to drive its profitability, going forward.

Through ShopHouse, Chipotle offers typical Southeast Asian cuisine coupled with naturally raised food, for which the company is well known. Moreover, customers can also enjoy customized meals, which will be cooked in front of them in an open kitchen.

These expansions can be seen as a positive step by Chipotle following its achievement to establish ShopHouse as an attractive brand in the U.S. We believe this concept to be an important long-term growth driver for this Zacks Rank #2 (Buy) company.

Chipotle’s innovative offerings always distinguish it from the other restaurateurs such as Panera Bread Co. (PNRA), McDonald's Corp. (MCD) and Yum! Brands Inc. (YUM). It already has its ‘Food With Integrity Program’ in store that focuses on a higher mix of naturally raised pork, chicken and beef, and organic produce.

It is the only national restaurant company to use fresh produce since 2008. The customers are fond of Chipotle’s naturally raised ingredients, which helps drive traffic growth.

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