(Reuters) -Chipotle Mexican Grill is increasing internationally with a location in Mexico that’s set to open early subsequent yr, it stated on Monday, bringing its tacos and burritos to the area for the primary time.
The corporate will enter the nation by way of a partnership with Mexican restaurant operator Alsea and can start exploring further growth markets within the area.
Following the information, shares in Chipotle have been down greater than 3%, whereas Alsea’s rose practically 3%.
Analysts warned of the potential pitfalls of working a U.S.-based Mexican chain in Mexico, with Antonio Hernandez at Actinver Analysis citing Taco Bell’s earlier failed makes an attempt to enter the market.
Locals’ “familiarity with its components doesn’t essentially predict success,” he wrote in a be aware to shoppers.
Chipotle signed its first worldwide improvement settlement with Kuwait-based Alshaya Group in July 2023 to enter the Center East market. The duo at present operates three eating places in Kuwait and two within the United Arab Emirates.
The transfer into Mexico comes after the burrito chain stated in February it was assessing the influence of U.S. President Donald Trump’s tariffs on the area and uncooked materials prices this yr.
Chipotle, like different eating places and fast-food chains that depend on provides from Mexico, additionally forecast tepid annual comparable gross sales progress, bracing for successful from inflation.
Alsea operates chains similar to Domino’s Pizza, Burger King and Starbucks in a dozen nations in Europe and Latin America.
The transfer advantages Alsea’s technique of diversifying its portfolio, analysts at brokerage Monex stated, including they have been awaiting extra particulars similar to pricing and placement plans.
Chipotle at present operates greater than 3,700 eating places and plans to open between 315 and 345 new eating places this yr globally.
(Reporting by Ananya Mariam Rajesh in Bengaluru; Writing by Rafael Escalera Montoto in Mexico Metropolis; Modifying by Shilpi Majumdar, Natalia Siniawski and Cynthia Osterman)