Restaurants

Chipotle offers half-price and 2-for-1 beers, hoping to drive dinner traffic

Chipotle offering alcoholic drink deals
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Chipotle offering alcoholic drink deals

Chipotle Mexican Grill may be seeing a boost in foot traffic from its Chiptopia loyalty program, but it doesn't seem to be enough for the burrito chain.

In an effort to further drive sales at its chains, Chipotle is adding half-price and 2-for-1 alcoholic drink specials to menus at several of its locations through September.

More than 1,700 Chipotle chains serve alcohol — some offer beer and margaritas, others just beer — but this promotion is running in about 300 restaurants in Iowa, Kansas, Kentucky, Missouri, Nebraska, Ohio, Colorado and Wisconsin, according to the company.

Alcohol accounts for about 2 percent of Chipotle's sales, according to the company.

"We know that [limited-service] restaurants do well at breakfast and lunch, but dinner tends to be more of a place for full-service restaurants to succeed," Darren Tristano, president of Technomic, told CNBC. "With the younger generation, who is looking for affordable beverages, limited-service can be that place."

While promotions help drive sales, they don't fix a restaurant's reputation, said Tristano.

Chipotle, in particular, has been struggling to entice customers to its restaurant following series of foodborne illness outbreaks at its chains. While the company saw modest improvement to frequency of purchases by its most loyal customers during the second-quarter, the burrito chain saw same-store sales decline 26.5 percent, a deeper drop than the 20.4 percent Wall Street expected, according to FactSet.

"If this promotion proves to be a success, we see the potential for it to be offered in other parts of the U.S. and perhaps throughout more of the year," Mark Kalinowksi, an analyst for Nomura, said in a research note Tuesday.

Chipotle could use a win. The company's stock is down more than 47 percent over the past year.

"Unfortunately, I think only time is going to help them with the sales hole," Tristano added. "I think consumers are very forgiving, but it's going to take more time."