WEBVTT - Boston Fed Taps Susan Collins as New President 0:00:01.800 --> 0:00:04.440 This is Bloomberg Business Week. I'm Carole Masser and I'm 0:00:04.480 --> 0:00:07.280 Bloomberg Quick Takes Tim Stanovk. We're here every day bringing 0:00:07.320 --> 0:00:09.840 you the latest news from the world to business and finance, 0:00:09.840 --> 0:00:13.680 plus technology, politics, economics, all purtnising the power of Business 0:00:13.680 --> 0:00:17.119 Week reporters and editors, not to mention our journalists and 0:00:17.160 --> 0:00:20.000 analyst in more than one twenty countries. You can download 0:00:20.000 --> 0:00:23.479 Bloomberg Business Weekend iTunes, SoundCloud, or Bloomberg dot Com. You 0:00:23.480 --> 0:00:25.439 can also listen to our radio show at two pm 0:00:25.480 --> 0:00:28.400 Eastern Time on Bloomberg Radio, or watch us on YouTube. 0:00:28.400 --> 0:00:32.320 Search Bloomberg Global News. Our top headline at this hour 0:00:32.400 --> 0:00:35.680 the Federal Reserve of Boston announcing that Susan Collins, a 0:00:35.840 --> 0:00:39.600 University of Michigan economists, will be it's new president, marking 0:00:39.600 --> 0:00:41.519 the first time a black woman will lead one of 0:00:41.560 --> 0:00:45.280 the US Central banks twelve districts. Collins succeeds rosen Gren, 0:00:45.280 --> 0:00:48.000 who resigned from the FED in September, and Collins is 0:00:48.040 --> 0:00:51.760 to be the FMC voter starting in July. All Right, 0:00:51.800 --> 0:00:54.040 good to know and some changes. We know that there's 0:00:54.040 --> 0:00:55.600 a lot of changes going on in the FED in 0:00:55.680 --> 0:00:58.640 terms of the makeup of the f O m C. 0:00:58.960 --> 0:01:01.680 Let's get to Bloomberg News economic supporter Steve Matthews. He 0:01:01.800 --> 0:01:03.760 is on the phone from our Atlanta bureau. He is 0:01:03.800 --> 0:01:08.560 our FED watcher and uh, Susan Collins tell us about 0:01:08.680 --> 0:01:14.120 this significance here, Steve, Yeah, I mean this is a 0:01:14.160 --> 0:01:19.160 groundbreaking choice. Uh. You know, as a few years back, 0:01:19.319 --> 0:01:25.560 Raffael Bostic became the first black man to be serving 0:01:25.760 --> 0:01:31.160 as a FED president with the Atlanta Fed. Uh, and 0:01:31.400 --> 0:01:35.959 now Susan Collins will become the first black woman ever 0:01:36.080 --> 0:01:40.240 to be serving as a president of one of the 0:01:40.319 --> 0:01:43.480 twelve FED banks. And the FED has been in existence 0:01:43.480 --> 0:01:48.960 since seven so what you know, hundred and thirteen, fourteen 0:01:49.040 --> 0:01:54.559 years and there this is it seems light to be 0:01:54.800 --> 0:01:58.200 talking about this kind of thing happening, but it is happening, 0:01:58.200 --> 0:02:03.200 and that is a big significance. And for that matter, 0:02:03.320 --> 0:02:08.560 the Biden administration has talked quite a bit about diversity 0:02:08.600 --> 0:02:13.240 and trying to have a central bank that looks like America, 0:02:13.520 --> 0:02:16.399 you know, and the government that looks like America. And 0:02:16.480 --> 0:02:20.480 you've just had too uh the deplotment of two African 0:02:20.520 --> 0:02:25.840 Americans uh to the to the FED Board of Governors, 0:02:25.880 --> 0:02:30.280 which you know, they're still waiting confirmation Lisa Cook obviously. 0:02:31.080 --> 0:02:35.160 Uh So it's interesting. I've spent the last few minutes 0:02:35.280 --> 0:02:38.880 trying to to look back at her monetary policy via 0:02:39.600 --> 0:02:42.760 and you know, is shea dove, is shea hawk? And 0:02:42.800 --> 0:02:47.000 it's like, honestly, we really don't know. That's interesting because 0:02:47.000 --> 0:02:48.600 that's where my next question was going, What do we 0:02:48.639 --> 0:02:50.800 know about her policy? I mean, she's got a PhD 0:02:50.800 --> 0:02:54.440 in economics from m I t uh the Boston Fed 0:02:54.520 --> 0:02:58.040 saying a statement quote Collins is an international Maccar economist 0:02:58.120 --> 0:03:04.720 with a lifelong interest in policy and impact on living standards. 0:03:02.400 --> 0:03:08.320 She has spent you know, I've got she has thirty 0:03:08.360 --> 0:03:13.400 two papers listed with the National Bureau Economic Research, UH, 0:03:13.520 --> 0:03:19.720 and they're almost all on international economy and international developments. Uh. 0:03:19.880 --> 0:03:22.880 She's written about Korea, She's written about Asia, She's written 0:03:22.880 --> 0:03:29.480 about currencies, she's written some about China, uh, but not 0:03:29.760 --> 0:03:32.840 a whole lot about US policy, and not a whole 0:03:32.880 --> 0:03:36.240 lot and nothing that I've been able to find so 0:03:36.360 --> 0:03:39.440 far on US monetary policy. The one thing that she's 0:03:39.480 --> 0:03:44.440 written that might strike some is as interesting, if not controversial, 0:03:44.640 --> 0:03:48.240 is in the wake of the two thousand uh seven 0:03:48.280 --> 0:03:52.360 two thousand nine financial crisis. She was advocating for a 0:03:52.400 --> 0:03:56.560 week er dollar along with a co author, saying that 0:03:56.680 --> 0:04:00.480 you know, we needed to boost the the beat up 0:04:00.520 --> 0:04:03.360 the economic recovery, and one way to do that would 0:04:03.360 --> 0:04:06.000 be to have a week dollar, which will help the 0:04:06.680 --> 0:04:11.840 help exporters in particular. I want to bring in our 0:04:11.840 --> 0:04:14.680 market round table because we're obviously watching a lot of 0:04:14.720 --> 0:04:18.520 things on this Wednesday and including this headline on the 0:04:18.520 --> 0:04:21.039 new head of the Boston fab. Let's bring in Creedy 0:04:21.040 --> 0:04:24.320 group to markets correspond at Bloomberg News at Bloomberg in 0:04:24.360 --> 0:04:27.400 our interactive broker studio along with Katie Greifeld, Bloomberg News 0:04:27.400 --> 0:04:30.279 processor reporter and also Tim's co anchor over on Bloomberg 0:04:30.360 --> 0:04:33.400 Quick take, Um, Creedy, you watch the markets more broadly, 0:04:33.440 --> 0:04:35.480 there's a lot going on. We're still getting a lot 0:04:35.480 --> 0:04:38.920 of big earnings headline like this. How do you think 0:04:38.920 --> 0:04:41.000 about it? Well, it's not gonna be market moving just yet. 0:04:41.120 --> 0:04:43.440 Like Steve was saying, there's no clear indication of where 0:04:43.440 --> 0:04:45.680 the policy lies. But what is interesting that she will 0:04:45.720 --> 0:04:49.400 be a voting member in two so when we do 0:04:50.160 --> 0:04:52.520 get Senate confirmation. But I guess I would assume she 0:04:52.520 --> 0:04:54.120 will I mean, it kind of seems like it, right, 0:04:54.160 --> 0:04:55.680 but Steve is going to be the expert on that. 0:04:55.960 --> 0:04:58.719 She will not need confirmation by anyone that the way 0:04:58.760 --> 0:05:02.359 the fed uh Bank President's work is. I mean, she 0:05:02.400 --> 0:05:05.400 has been approved by the Fed's Board of Governors. There 0:05:05.560 --> 0:05:09.880 is no additional confirm confirmation needed for her for the 0:05:09.880 --> 0:05:12.240 Board of Governors, but not for the FED Bank president. 0:05:12.320 --> 0:05:14.960 I was thinking of Lisa Cook, right, and okay, forgive 0:05:14.960 --> 0:05:17.240 me so my bad. Yeah, thank you, thank you. Steve. Well, 0:05:17.279 --> 0:05:19.960 that just amps up the what's at stake here? Right 0:05:19.960 --> 0:05:21.760 When we do get that indication of what that mon 0:05:21.839 --> 0:05:23.440 Terrey policy is going to look like, her take is 0:05:23.480 --> 0:05:25.280 going to look like that's really going to be a 0:05:25.320 --> 0:05:27.479 key piece at least for the dot plot um. In 0:05:27.560 --> 0:05:29.320 terms of the markets, though, I mean, let's just stick 0:05:29.320 --> 0:05:31.640 with the bond market here. That two percent yield is 0:05:31.920 --> 0:05:34.080 something that I think is coming up on everyone's horizon. 0:05:34.120 --> 0:05:36.080 We're looking ating at one nine two on the tenure 0:05:36.440 --> 0:05:38.240 and it kind of seems like there's a little bit 0:05:38.240 --> 0:05:40.400 of relief in the markets because we pull back from 0:05:40.400 --> 0:05:42.960 that level. A similar story in the oil pulling back 0:05:43.000 --> 0:05:45.600 from that one oil there's some scary levels that I 0:05:45.680 --> 0:05:48.400 think stock the stock market investors are kind of watching, 0:05:48.400 --> 0:05:50.640 and I think the fact that we're not as close 0:05:50.680 --> 0:05:52.560 as we were a couple of days ago, that's adding 0:05:52.560 --> 0:05:54.080 to the relief out we got so close to that 0:05:54.120 --> 0:05:56.520 two mark we did. Hey, Katie Grafel, come on in here. 0:05:56.520 --> 0:05:58.760 And because just a few minutes ago before we got 0:05:58.760 --> 0:06:01.120 this news, you were watching the strong tenure treasury auction. 0:06:01.640 --> 0:06:05.920 Takeaways from that, Yeah, there is bonds right now, is 0:06:06.400 --> 0:06:10.120 why we're not anywhere in two percent striking distance. You 0:06:10.200 --> 0:06:14.240 saw that the tenure treasury auction from the Treasury Department, 0:06:14.360 --> 0:06:17.359 it was it saw the lowest amount awarded to primary 0:06:17.400 --> 0:06:21.400 dealers ever. Reminder these investors, they have to bid at auction, 0:06:21.800 --> 0:06:24.560 so to see such a low allotment there, that really 0:06:24.600 --> 0:06:27.360 speaks to how much demand there is for bonds right now, 0:06:27.360 --> 0:06:29.440 which is really interesting because we're going to get a 0:06:29.560 --> 0:06:33.440 very hot CPI report tomorrow potentially, Yeah, big deal, And 0:06:33.480 --> 0:06:36.039 it's exciting that Susan Collins is a wild card. We 0:06:36.040 --> 0:06:37.960 don't know how she's going to be looking at those 0:06:38.040 --> 0:06:40.800 numbers tomorrow. So you did fun but inflation right in 0:06:40.839 --> 0:06:42.719 terms of these fixed income investments just kind of eats 0:06:42.720 --> 0:06:44.760 away at the returns. I know, but I mean there's 0:06:44.760 --> 0:06:46.839 a lot of talk that maybe this will be the 0:06:46.920 --> 0:06:49.000 peak cp I print, that we're going to start to 0:06:49.040 --> 0:06:52.040 get lower, cooler readings from here. So I mean, if 0:06:52.080 --> 0:06:53.880 that's the bet, you probably want to be buying bonds 0:06:53.960 --> 0:06:55.840 right now. All right, we gotta run, guys, Thank you 0:06:55.920 --> 0:06:58.760 so much. Are thanks to Katie and Creedy Credy. We 0:06:58.880 --> 0:07:00.840 back lit bit later on with her chart of the day, 0:07:00.839 --> 0:07:02.839 and of course our thanks to Bloomberg News Economics reporter 0:07:02.880 --> 0:07:06.520 Steve Matthews on that breaking news the Boston Fed with 0:07:06.560 --> 0:07:09.920 a new head. This is Bloomberg Business Week with Carol 0:07:10.000 --> 0:07:14.440 Messer and Bloomberg Quick Takes. Tim Stinovic on Bloomberg Radio. 0:07:14.680 --> 0:07:17.960 The investors definitely loving companies that increase their prices, and 0:07:17.960 --> 0:07:20.440 that includes the next one that we're going to talk about. 0:07:20.520 --> 0:07:24.320 We're mentioning Chippotle Mexican Girl shares jumping about ten percent 0:07:24.400 --> 0:07:27.520 most's last summer. Following last night's quarterly update, it showed 0:07:27.520 --> 0:07:31.280 that fourth quarter sales COMP sales adjusted EPs all topping estimates. 0:07:31.320 --> 0:07:34.400 Company also raising its outlook. The company CEO, Brian Nichols 0:07:34.400 --> 0:07:36.160 sang on the call he's not seeing any signs and 0:07:36.200 --> 0:07:40.360 inflation is slowing down. Specifically Tim highlighting higher beef colls, 0:07:40.360 --> 0:07:42.600 saying the company may have to raise prices again also 0:07:42.960 --> 0:07:45.440 raise wages. Well, let's bring in Jack hard Tongue, chief 0:07:45.440 --> 0:07:48.760 financial officer for Chippotle Mexican Drill. He joins us on 0:07:49.240 --> 0:07:53.440 via zoom from Chicago, so folks watching on YouTube certainly 0:07:53.440 --> 0:07:56.360 see him there. Jack. How are you. I'm great. How 0:07:56.360 --> 0:07:57.920 are you guys doing. We're doing well. Thanks. I want 0:07:57.920 --> 0:07:59.600 to jump right into it with the with the with 0:07:59.680 --> 0:08:02.320 the price s power. Considering the rising input costs that 0:08:02.600 --> 0:08:05.760 you guys called out yesterday in your earnings release, help 0:08:05.840 --> 0:08:09.760 us understand how much pricing power you have to raise 0:08:09.800 --> 0:08:12.480 the price of items on the menu in order to 0:08:12.680 --> 0:08:16.040 combat those higher input costs. Yeah, you know, it's one 0:08:16.040 --> 0:08:18.560 of these kind of mysteries if you will, TI, and 0:08:18.560 --> 0:08:21.720 that you kind of hope you never find out the reason. 0:08:22.040 --> 0:08:24.880 The reason is, if you find out, it means you've 0:08:24.960 --> 0:08:27.520 raised prices too high and it and it means customers 0:08:27.520 --> 0:08:30.560 are resisting. We've always been very thoughtful whenever we've had 0:08:30.600 --> 0:08:34.320 to raise prices, including in this environment, and frankly, every 0:08:34.360 --> 0:08:37.760 other restaurant company, grocers, everyone is raising prices. So we 0:08:37.840 --> 0:08:40.160 still think that we're kind of you know, at or 0:08:40.240 --> 0:08:43.079 maybe a little bit behind the media and what companies 0:08:43.120 --> 0:08:45.880 are doing. And so, um, what we want to do 0:08:45.920 --> 0:08:47.520 is we we while we think that we can raise 0:08:47.559 --> 0:08:51.160 prices for we'll watch and see how the inflation environment unfold. 0:08:51.559 --> 0:08:53.800 We do think we've got additional pricing power and if 0:08:53.840 --> 0:08:55.920 we need to, we'll spend it, but we'll look at 0:08:55.960 --> 0:08:58.920 other things like efficiencies and um, you know, are there 0:08:58.960 --> 0:09:01.920 other ways to find some you know, cause sating opportunities 0:09:02.280 --> 0:09:04.200 and if there aren't, and if we have to raise prices, 0:09:04.200 --> 0:09:05.720 will we'll do that, But it won't be the first 0:09:05.720 --> 0:09:08.040 thing we'll do. Where Jack, are you seeing the costs 0:09:08.240 --> 0:09:10.480 rise the most and the quickest? Is it wages or 0:09:10.520 --> 0:09:13.160 is it on the commodity side? Yeah, well, you know way, 0:09:13.240 --> 0:09:16.200 wages really increased a lot last year, and in our case, 0:09:16.240 --> 0:09:18.520 we took a big stair step. We increased our wages 0:09:18.920 --> 0:09:22.320 by about fifteen percent for all of our restaurant employees. Um, 0:09:22.360 --> 0:09:24.240 and that was you know a big impact. And then 0:09:24.280 --> 0:09:26.679 we did that in the April May timeframe. That's when 0:09:26.679 --> 0:09:29.360 it became clear to us that there was a in 0:09:29.480 --> 0:09:32.840 balance between the demand that we and other companies had 0:09:32.840 --> 0:09:35.480 for labor as the economy was opening up, and then 0:09:35.480 --> 0:09:39.080 the people coming back into the workforce that helped us significantly. UM. 0:09:39.120 --> 0:09:42.079 That allowed us to retain our existing people, that allowed 0:09:42.120 --> 0:09:44.720 us to increase application flow. You know, we're growing company, 0:09:44.960 --> 0:09:47.559 so we're constantly hiring people. Um. And so that allowed 0:09:47.640 --> 0:09:50.360 us to stabilize the workforce to the point where right 0:09:50.360 --> 0:09:53.280 now we feel like we're in a good labor position. 0:09:53.320 --> 0:09:56.800 It's not it's not like we're completely you know, over 0:09:56.840 --> 0:09:59.360 the challenge. It's still a challenge, but we're as good 0:09:59.360 --> 0:10:03.000 of a labor staffing position now as we were even 0:10:03.000 --> 0:10:05.240 before the pandemic. And uh, you know, I don't know 0:10:05.280 --> 0:10:07.240 that every company could say that right now. Hey Jack, 0:10:07.280 --> 0:10:09.640 do you feel like, in terms of the labor shortages 0:10:09.679 --> 0:10:11.680 and the crunch that we're hitting peak and that things 0:10:11.679 --> 0:10:14.839 will start to get better? And same same side, the 0:10:14.880 --> 0:10:16.920 same questions on on the pricing side of things. Do 0:10:16.960 --> 0:10:19.480 you feel like we're getting kind of inflation peak? If 0:10:19.520 --> 0:10:23.480 you will? Yeah, I don't think either are over. I 0:10:23.480 --> 0:10:25.640 think labor is going to continue to go up, but 0:10:25.720 --> 0:10:28.640 I would expect there won't be another kind of shock, 0:10:28.800 --> 0:10:30.880 like like when we we were kind of at the 0:10:30.920 --> 0:10:32.880 leading edge when we raise prices in the May or 0:10:33.200 --> 0:10:36.319 wages in the May June time. Frank most other hospitality 0:10:36.320 --> 0:10:39.000 and restaurant companies have followed since then. I think they're 0:10:39.000 --> 0:10:43.040 going to be increases, meaningful increases, but I don't expect 0:10:43.040 --> 0:10:45.480 that there will be another fifteen percent jump. What we're 0:10:45.480 --> 0:10:47.480 seeing right now is there are pockets where when there 0:10:47.480 --> 0:10:50.360 are shortages that you're gonna have to maybe raise wages 0:10:50.440 --> 0:10:53.400 at a in a preemptive manner rather than just, you know, 0:10:53.559 --> 0:10:57.040 rather than risking falling behind you know, the wages in 0:10:57.080 --> 0:10:59.920 that market. From a commodity standpoint, most of our channel 0:11:00.120 --> 0:11:03.000 has been in beef. That's been throughout the year, and 0:11:03.000 --> 0:11:05.680 in the fourth quarter it hit us again. Freight as well, 0:11:05.800 --> 0:11:08.000 especially we get a lot of our packaging in from 0:11:08.040 --> 0:11:10.240 outside the US, and freight has been a real challenge, 0:11:10.480 --> 0:11:12.640 not only just to get enough supply because there's such 0:11:12.640 --> 0:11:15.680 bottlenecks at the boards, but also the cost of freight 0:11:15.760 --> 0:11:20.680 is going up significantly. Our outlook suggests that um nothing 0:11:20.760 --> 0:11:23.480 is going to ease in terms of material or great 0:11:23.520 --> 0:11:26.320 an inflation to let the earliest later in the year, 0:11:26.440 --> 0:11:29.400 maybe not even until Wow. So it sticks around for 0:11:29.440 --> 0:11:32.120 a while. Hey, I'm curious about wages too, because that's 0:11:32.160 --> 0:11:34.240 something that we've talked to a lot of economists, Jack, 0:11:34.280 --> 0:11:37.000 that that stays with you, that cost. And I'm curious, 0:11:37.400 --> 0:11:40.000 I've spent a lot of time with your previous administration 0:11:40.040 --> 0:11:42.920 that you guys pride yourself and holding onto workers and 0:11:43.080 --> 0:11:46.000 grooming them to move up the chain. So will those 0:11:46.200 --> 0:11:50.240 higher labor costs be problematic maybe down the road. No. 0:11:50.679 --> 0:11:53.520 In fact, we still pride ourselves on our people culture. 0:11:53.640 --> 0:11:56.280 You know, we we promoted nineteen thousand people last year. 0:11:56.320 --> 0:11:58.439 That's that's what you do when you have a thriving, 0:11:58.480 --> 0:12:01.080 growing company. Um, We've like the idea that when crew 0:12:01.160 --> 0:12:03.360 join us today, that they can join us for a 0:12:03.440 --> 0:12:05.720 job today, but that can turn into a career over time, 0:12:06.040 --> 0:12:08.280 and even that they don't stay with chipotlea their entire career. 0:12:08.600 --> 0:12:10.640 We will teach them skills like how to cook in 0:12:10.679 --> 0:12:12.440 a real restaurant, will teach them how to leave people, 0:12:12.640 --> 0:12:15.000 will teach them how to run a business. And if 0:12:15.040 --> 0:12:16.719 they say with us, that's fantastic. If not, if they're 0:12:16.760 --> 0:12:19.320 still going to learn life skills. And so we run 0:12:19.320 --> 0:12:21.480 all of our restaurants where unique in the restaurant industry 0:12:21.480 --> 0:12:23.679 where we have almost three thousand restaurants. None of them 0:12:23.720 --> 0:12:26.600 are franchised. So we need to have the ability to 0:12:26.679 --> 0:12:29.480 hire great people, to develop great people, and and to 0:12:29.520 --> 0:12:31.840 give them opportunities to move into management roles. And that's 0:12:31.960 --> 0:12:34.160 that's alive and well. Edge Fully, Hey, I want to 0:12:34.160 --> 0:12:37.520 talk a little bit about growth and expansion physical expansion here. 0:12:37.679 --> 0:12:40.559 In your release yesterday, you said, based on those successive 0:12:40.600 --> 0:12:43.640 small town locations that are delivering unit economics at or 0:12:43.679 --> 0:12:46.920 better than traditional Chipotle locations, you are now you now 0:12:46.960 --> 0:12:49.720 believe there can be at least seven thousand Chippotle restaurants 0:12:49.720 --> 0:12:52.319 in North America, up from that prior goal of six 0:12:52.360 --> 0:12:55.360 thousand restaurants. Talk to us about the competition for real 0:12:55.480 --> 0:12:58.040 estate here and how difficult it is to actually find 0:12:58.440 --> 0:13:02.200 compelling real estate opportunities in a market like this. Yeah, 0:13:02.280 --> 0:13:04.840 you know, it's always been a challenge. There's always broke 0:13:04.920 --> 0:13:07.920 companies out there. But um, we do really well. And 0:13:07.920 --> 0:13:10.319 the reason we do well is that, as I mentioned, 0:13:10.360 --> 0:13:12.720 we're company owned, so we can make quick decisions. We 0:13:12.800 --> 0:13:15.960 have a dynamite real estate development team and so they're 0:13:15.960 --> 0:13:17.720 out there. They know the brokers, they know the sites, 0:13:17.760 --> 0:13:20.160 they know how to dig great sites. UM. And when 0:13:20.160 --> 0:13:22.960 we show up and knock on the door of a 0:13:23.120 --> 0:13:26.319 landlord or developer and we're interested in space, they love 0:13:26.400 --> 0:13:29.040 to have chuppote L in their UM in their development. 0:13:29.240 --> 0:13:31.920 The reason is we bring traffic to their development. And 0:13:31.960 --> 0:13:34.600 so if we're in a center where there's five or 0:13:34.640 --> 0:13:37.600 six or seven different tenants there, UM, they can count 0:13:37.600 --> 0:13:39.320 on the fact that Chippotele will bring a lot of 0:13:39.320 --> 0:13:41.559 people to their center, they will recognize some of the 0:13:41.600 --> 0:13:44.160 other tenants as well. UM. So UM you know, so 0:13:44.200 --> 0:13:46.240 we get a lot of attention and we're one of 0:13:46.240 --> 0:13:49.000 the preferred tenants out there. UM. We also have been 0:13:49.080 --> 0:13:52.520 very successful in not just securing the sites, but also 0:13:52.640 --> 0:13:55.520 getting the approval to get a chapot Lang, which that's 0:13:55.520 --> 0:13:58.400 our version of a digital drive through UM. And even 0:13:58.480 --> 0:14:00.360 if we don't have a free standard and it's a 0:14:00.400 --> 0:14:03.120 it's a great convenience for our customers and our landlords 0:14:03.120 --> 0:14:05.440 and developers have been working really well with us to 0:14:05.480 --> 0:14:06.840 make sure we can get the chippot Lane and so 0:14:06.920 --> 0:14:09.960 that's that's because we really bring um, you know, something 0:14:10.000 --> 0:14:11.800 to their center that they're really after, and that's that's 0:14:11.800 --> 0:14:14.360 more foot traffic That's what I wanted to ask you though. Um, 0:14:14.480 --> 0:14:17.240 you guys out at your first digital only chippot Lane restaurant. 0:14:17.280 --> 0:14:20.040 I believe it was late last year. Uh in New 0:14:20.120 --> 0:14:22.600 York State. How's that going in? Is there? What are 0:14:22.640 --> 0:14:26.160 the expansion plans with that? Yeah, it's it's actually really good. 0:14:26.240 --> 0:14:30.200 We have to now fully digital restaurants. What that means 0:14:30.280 --> 0:14:32.800 is there's no front line. So if you walk into 0:14:32.800 --> 0:14:34.760 a restaurant, you're not going to see a front line 0:14:34.800 --> 0:14:37.119 with a register where you can order and then pay. 0:14:37.160 --> 0:14:39.840 Everything has to be ordered ahead. You can order ahead 0:14:39.840 --> 0:14:42.200 and pick up um in in one of the two 0:14:42.240 --> 0:14:44.640 cases we've got chipot Lane, so you can order ahead, 0:14:44.880 --> 0:14:46.880 not get out of your car. You still can get 0:14:46.920 --> 0:14:48.560 out of your car and walk into the restaurant if 0:14:48.560 --> 0:14:50.320 you if you like, and our team will treat you 0:14:50.360 --> 0:14:53.800 to great experience, but you have to order ahead there. 0:14:53.800 --> 0:14:56.560 These are early days. These are early experiments. We do 0:14:56.640 --> 0:14:58.760 think there's gonna be opportunities for what we call a 0:14:58.880 --> 0:15:01.720 seam location, meaning you could have a lot of totally 0:15:01.800 --> 0:15:04.160 restaurants in a certain trade area and then there's an 0:15:04.200 --> 0:15:06.440 underserved area kind of in the middle that might be 0:15:06.520 --> 0:15:08.640 a great spot for a smaller restaurant that has just 0:15:08.800 --> 0:15:11.920 chicot lane um and no frontline ordering. So UM, it's 0:15:11.920 --> 0:15:14.440 early days and we'll find where these make the most sense. 0:15:14.440 --> 0:15:16.440 But they're up both thoughts to a great start in 0:15:16.480 --> 0:15:20.800 that same vein digital sales. For one, for the full 0:15:20.880 --> 0:15:23.720 year forty five point six percent of sales. Carol mentioned 0:15:23.880 --> 0:15:25.840 how they shot up during the pandemic. What's a way 0:15:25.880 --> 0:15:30.120 for investors to think about that digital versus physical mix 0:15:30.480 --> 0:15:32.280 when we do get to the other side of the pandemic, 0:15:32.280 --> 0:15:35.800 where does it stabilize? Yeah, you know, our our guests, 0:15:35.800 --> 0:15:38.640 and it really is just a guess that it probably 0:15:39.200 --> 0:15:42.800 bounces at about at or in that low forty percent range. 0:15:43.000 --> 0:15:45.800 When we look at our markets throughout the country and others, 0:15:46.160 --> 0:15:48.960 you know, different markets have have had different impacts from 0:15:49.040 --> 0:15:51.240 covid um and they have come out of covid faster 0:15:51.400 --> 0:15:53.200 or slower. When we look at the ones that were 0:15:53.280 --> 0:15:57.080 least impacted, um, they didn't fall below at range. And 0:15:57.080 --> 0:15:59.520 when we look at the fort of digital sales today, 0:15:59.800 --> 0:16:02.960 the is are mostly our loyal customers. They come very often, 0:16:03.000 --> 0:16:05.520 they tend to spend more, and they really like the 0:16:05.560 --> 0:16:08.800 digital channel. The convenience of digital Once you get into 0:16:08.800 --> 0:16:10.680 our app once you sign up as a loyalty member, 0:16:10.960 --> 0:16:13.320 is so easy that our customers tend to stick with it. 0:16:13.400 --> 0:16:15.960 So I would see that will probably stay in this 0:16:16.280 --> 0:16:19.040 you know, load and mid range UM, and then we'll 0:16:19.080 --> 0:16:22.120 bounce up from there as more and more customers discovery digital. 0:16:22.240 --> 0:16:24.040 The reality is, even though it's almost forty percent of 0:16:24.040 --> 0:16:26.960 our business, the majority, the largest group of our customers 0:16:27.040 --> 0:16:29.400 have never tried digital. So there's still a big opportunity 0:16:29.440 --> 0:16:31.240 for us. Hey, Jack, just got about a minute or 0:16:31.240 --> 0:16:32.760 so left here. You've been at to potl for what 0:16:32.880 --> 0:16:35.840 twenty years? You've seen a lot at that name alone 0:16:35.920 --> 0:16:39.360 McDonald's before that. You understand this industry. But this is 0:16:39.400 --> 0:16:43.080 an interesting time coming off a pandemic. Uh. We love 0:16:43.120 --> 0:16:44.960 to hear from the c suite. What's top of mind 0:16:45.000 --> 0:16:47.960 for you right now? Yeah, I mean the most important 0:16:47.960 --> 0:16:51.680 thing to me and our entire executive team is people. Um. 0:16:51.720 --> 0:16:54.480 I mean, we have a food ethos um. We really 0:16:54.480 --> 0:16:56.520 take pride in the quality of food that we source, 0:16:57.160 --> 0:16:59.240 the quality food that we cook in the restaurant. But 0:16:59.440 --> 0:17:01.760 all of that with great people. That means great people 0:17:01.760 --> 0:17:04.320 on the front lines, it means great managers for the 0:17:04.320 --> 0:17:07.679 two fifty restaurants we're going to open up, you know 0:17:07.760 --> 0:17:09.840 during this year. It means great people in our office 0:17:09.920 --> 0:17:13.200 as well to support our restaurants. The reason we are 0:17:13.320 --> 0:17:16.000 company owned in that franchise is it takes a lot 0:17:16.080 --> 0:17:17.880 of hard work, a lot of care and a commitment 0:17:17.920 --> 0:17:21.040 to a purpose to actually care about the food, how 0:17:21.080 --> 0:17:23.240 we source it, how we cook and training customers a 0:17:23.280 --> 0:17:25.480 great experience. And so as long as we have a 0:17:25.480 --> 0:17:29.680 great pipeline of people joining Chipotle developing into the management ranks, 0:17:29.760 --> 0:17:31.560 we'll have a bright, bright bright future. That's that's that's 0:17:31.560 --> 0:17:33.760 something that's going to be a high priority really in 0:17:33.840 --> 0:17:35.960 any environment for us. All right. The only thing that 0:17:36.000 --> 0:17:37.960 would have made it this better is having some guacamole 0:17:38.080 --> 0:17:39.679 with you. I'm just gonna say in the house, but 0:17:41.359 --> 0:17:45.040 you're making me hungry me as well. Um, Jack, thank 0:17:45.119 --> 0:17:47.240 you so much. Hello to all of your team, and 0:17:47.240 --> 0:17:49.600 we really appreciate it. That's of course Jack Carton. He's 0:17:49.600 --> 0:17:52.199 the chief financial officer of Chipotle Mexican Grill. On the 0:17:52.320 --> 0:17:55.680 Zoom from Chicago, this stock it is one of the 0:17:55.880 --> 0:17:58.560 performers on the S and P five hundred today. You're 0:17:58.600 --> 0:18:01.960 listening to Bloomberg Bus. This Week with Carol Messer and 0:18:02.040 --> 0:18:06.880 Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Super Bowl yep, 0:18:06.960 --> 0:18:09.280 it's this weekend big matchup between the Bengals and the 0:18:09.359 --> 0:18:12.640 Rams and Bloomberg I got sum my microphone on Go Bengals. 0:18:13.720 --> 0:18:16.200 The cover story of Bloomberg Business Week this week is 0:18:16.200 --> 0:18:18.880 about the Big Game and the betting apps that want 0:18:18.960 --> 0:18:20.920 you to come for the game. And then you know it, 0:18:21.000 --> 0:18:23.919 Tim staying Gamble forever. Yeah, and you're certainly seeing the 0:18:23.960 --> 0:18:26.960 ad spend to accompany their desire to actually get you 0:18:27.080 --> 0:18:29.440 on the platforms. Joel Weber is that at Bloomberg Business 0:18:29.440 --> 0:18:31.920 Weeki's with us in the Bloomberg Interactive Broker studio. Peter 0:18:31.960 --> 0:18:35.920 Robisson Projects and investigated investigations reporter for Bloomberg News. He 0:18:36.000 --> 0:18:38.879 joins us on the phone from Seattle. Joel, it certainly 0:18:38.920 --> 0:18:42.159 feels like, and it's clear reading this story by by 0:18:42.200 --> 0:18:46.240 Peter and Ira, that there has been this sea change 0:18:46.480 --> 0:18:51.520 when it comes to the acceptance of sports betting from 0:18:51.520 --> 0:18:54.440 something that was illegal and you know, prevented people from 0:18:54.480 --> 0:18:58.399 joining halls of fames, uh, to something that is actually 0:18:58.440 --> 0:19:01.560 being embraced by the league's What happened uh, the smartphone. 0:19:03.359 --> 0:19:06.160 It's kind of kind of true though, I think, um, 0:19:06.359 --> 0:19:09.440 what with the story really goes into here is the 0:19:09.720 --> 0:19:13.800 look everybody's We've long seen what sports gambling can do, 0:19:13.920 --> 0:19:17.000 and there it's always been a concern that the integrity 0:19:17.000 --> 0:19:19.879 of the game would be in question. Um and and 0:19:19.920 --> 0:19:23.359 that is a legitimate concern. As as Peter and Ira 0:19:23.600 --> 0:19:26.879 write in the story, basically every every sport in every 0:19:26.960 --> 0:19:30.399 league around the world that has had to deal with 0:19:30.520 --> 0:19:33.959 legal betting has had to confront this question of like 0:19:34.359 --> 0:19:37.320 is does this have the potential to undermine the sanctity 0:19:37.359 --> 0:19:40.760 of the game? And uh, that was a thing that 0:19:40.800 --> 0:19:44.720 the NFL obsessed over for years and did not want 0:19:44.720 --> 0:19:50.000 to embrace uh gambling. And then it was just like 0:19:50.720 --> 0:19:54.480 never mind and and part of that was the money. 0:19:54.720 --> 0:19:57.160 Um so, so Peter like, this has been a sea 0:19:57.280 --> 0:20:00.960 change just within the last couple of years. What makes 0:20:01.080 --> 0:20:05.920