Chipotle rival Guzman y Gomez Mexican Kitchen – Business News
Guzman y Gomez Mexican Kitchen, an Australian-born Chipotle rival that after deliberate to open a whole lot of US areas, has abruptly closed all of its American eating places after six years within the Chicago space.
“All GYG USA restaurants permanently closed,” a message on the company’s US web site says. “Effective from May 22nd, GYG USA restaurants will cease trading. Thank you for your support.”
The chain additionally introduced the transfer on Instagram, thanking prospects and staff in Chicagoland, the place all eight of its US eating places have been situated.
“After six years of burritos and big dreams in Chicagoland, we’ve made the difficult decision to close our US restaurants,” the post learn. “To every guest who came through our doors – you chose us, and we never took that for granted.”
“To our team – thank you. Your passion and your purpose built something special. If you’re ever in Australia, Singapore or Japan, come find us – we’ll have your favs waiting for you. Chicagoland, Thank you!”
Australian Chipotle rival Guzman y Gomez abruptly closed all 8 of its US eating places in Chicago. Bloomberg by way of Getty Images
The shutdown marks a sharp reversal for Guzman y Gomez, which had just lately reaffirmed its intent to broaden within the US market. The company (ASX: GYG) was based in Australia by native New Yorkers Steven Marks and Robert Hazan and made its US debut in 2020 with ambitions to construct a a lot bigger American footprint.
“I have always been confident in the differentiation of our food and guest experience, however this was not translating to an improvement in sales momentum,” Marks mentioned in an Australian Securities Exchange announcement, Business News Australia reported.
“Having spent the final three months within the US, I noticed this was going to take considerably more time and capital than we had anticipated.
“In assessing the trajectory of the current network, the board and I have concluded that the business is unlikely to deliver the performance that would justify continued investment of shareholder capital.”
The company selected the Chicago space as its entry level. At the time, its founders mentioned they supposed to open “hundreds, if not thousands” of Guzman y Gomez areas throughout the nation.
Instead, the company is exiting the US fully, which has helped its stock price in Australia surge more than $3 Australian from $18.05 to $21.10 when the information dropped Friday morning.
“We have a long runway ahead of us in Australia as we progress towards our longterm target of 1,000 restaurants and segment underlying EBITDA as a percentage of network sales of 10%,” Marks mentioned.
“Concentrating our capital, focus and infrastructure behind this opportunity is the most effective way to compound shareholder value over the long term.”
The retreat comes as US eating places face stress from cautious customers, greater food prices and declining site visitors.
CEO Steven Marks admitted the US enterprise needed “significantly more time and capital” than anticipated, making it unsustainable. Bloomberg by way of Getty Images
TheRoad reported that three in 10 Americans have cut back on retail spending and restaurant visits in contrast with a 12 months earlier, citing S&P Global knowledge. Food-away-from-home costs rose 39.3% from January 2019 to January 2026, far sooner than within the earlier seven-year period, in keeping with the identical report.
Those headwinds have weighed on chains throughout the industry, particularly these making an attempt to scale in crowded classes.
Guzman y Gomez positioned itself as a cleaner tackle fast-casual Mexican food, touting no added preservatives, no synthetic flavors, no added colours and no “unacceptable additives” on its Australian web site.
Its US closure leaves Chipotle — which has roughly 4,000 eating places — with out one of its smaller fast-casual Mexican challengers within the American market.
RBC Capital Markets analyst Michael Toner advised Reuters the exit might be optimistic for Guzman y Gomez’s broader business as a result of its US operations had restricted prospects and have been weighing on earnings.
“The U.S. business had very low prospects of being successful, and the losses of the business were weighing down the earnings of the group so the sooner exit than anticipated is positive,” Toner mentioned.
