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SEC Filings

S-1/A
CHIPOTLE MEXICAN GRILL INC filed this Form S-1/A on 12/23/2005
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    Focusing On Our Vision to Appeal to Customers

        Our menu is intentionally simple. By focusing on just a few menu items, we can concentrate our effort on doing a few things very well. We haven't really changed our approach that much since 1993, but we've strived to make our food taste better. For example, we've tried to improve the quality of our ingredients, when we can do so at a reasonable price. We believe that by focusing on the details of quality, service and the Chipotle experience, we'll be able to bring great food—and our vision—to new customers and keep existing customers coming back. The more people understand and share our vision of "food with integrity," we think the more they'll want to eat our food. We believe that consumers' increasing concern about the food they eat will foster demand for higher-quality foods. We believe this, in turn, will attract the interest and capital investment of larger farms and suppliers, and help us make our food more accessible. That said, we understand that we'll continue to be at the forefront of this trend and must balance our interest in advancing "food with integrity" with our desire to provide great food at reasonable prices.

    Expanding Our Operations and Sales

        We plan to increase both sales and profits by opening new stores and increasing comp store sales:

    Building More Stores.    We plan to grow in a measured and disciplined way by strategically adding stores in existing and new markets. We plan to open at least 75 stores in 2005, of which 58 were already open and 17 were under construction on October 31, 2005. We believe most of our sales increases will come from opening new stores. As we've grown and become increasingly well-known, we've developed specific criteria that we continuously review and adjust to evaluate each site, as store locations are critical to our long-term success.

    Selling More Food Every Day.    We continue to focus on ways to improve the customer experience at our existing stores so we can increase comp store sales. We believe that the best way to do this is to speed up our service to sell food to more customers. We're doing this by, for example, enhancing our staffing and training models, expanding our use of fax service lines and implementing our new Chipotle DSL (Don't Stand in Line) online ordering system. These changes allow us to accommodate more customers and larger orders without disrupting store traffic. We'll also consider additions to our menu that could enable us to enhance sales. For example, in 2005 we rolled out our salad. Given the brand loyalty that our customers have shown, we believe that another way we can grow sales is by getting more people to try our food. We hope to keep expanding brand awareness in various ways, including through free food giveaways, word-of-mouth marketing and innovative ads and promotions.

Our Industry

        Research shows that people need to eat. Where and what they choose to eat, however, has been gradually changing over time. Studies show that, over the past 50 years, people in the United States have relatively steadily shifted toward purchasing food away from home, instead of preparing and eating food at home. And the restaurant industry has grown to accommodate that trend. The National Restaurant Association estimates that the U.S. industry's sales in 2005 will reach $476 billion (about 4.0% of the U.S. gross domestic product) at 900,000 locations nationwide. The Association further predicts that, by 2010, food purchased away from home will represent more than half of all consumer food purchases, and that the number of restaurants around the country will swell to more than a million locations.

        We believe that there are many reasons that the industry is expanding and eating out is becoming increasingly popular. A growing population means more customers for restaurants to draw from, higher income levels (particularly among dual-income families, "Gen-Xers" and "baby boomers") mean more discretionary income to spend eating out, and busier lifestyles mean people have less time to prepare food at home. As a result, more people are willing to pay for the convenience of quality food made by others. As the restaurant industry adapts to consumer trends, restaurants (including fast-casual restaurants in

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