Guzman y Gomez Mexican Kitchen, an Australian-based fast-casual chain and Chipotle rival, has permanently closed all of its U.S. restaurants as of May 22, 2024, ending its six-year presence in the Chicago area [1]. The company announced the closure on its U.S. website and Instagram, thanking customers and employees in Chicagoland, where all eight of its American locations were situated [1].
The decision marks a significant reversal for Guzman y Gomez, which had previously expressed ambitions to open hundreds or even thousands of U.S. locations after entering the market in 2020 [1]. Co-founder Steven Marks stated in an Australian Securities Exchange announcement that, despite confidence in the brand's food and guest experience, sales momentum in the U.S. was lacking [1]. Marks noted that turning the U.S. business around would require more time and capital than anticipated, and the board concluded that continued investment was not justified given the current performance trajectory [1].
Following the announcement, Guzman y Gomez's stock price in Australia surged by more than $3 Australian, rising from $18.05 to $21.10 on Friday morning [1]. Marks emphasized that the company will now focus on expanding in Australia, with a long-term target of 1,000 restaurants and a segment underlying EBITDA as a percentage of network sales of 10% [1].
The closure comes amid broader challenges for U.S. restaurants, including cautious consumer spending, higher food costs, and declining traffic [1].
CONCLUSION
Guzman y Gomez's exit from the U.S. market underscores the difficulties facing international restaurant chains in the current American economic climate. The company's refocus on its Australian operations was met with a positive reaction from investors, as reflected in its stock price surge. This strategic shift aims to maximize shareholder value by concentrating resources on more promising markets.