Chipotle Mexican Grill, Inc. (CMG) vs. Taco Bell: Who Wins?

Although anecdotal evidence is never the be-all and end-all, one factor of investing in retail stocks is the mix of fun and function. Take the simple observations one can make in, say, a shopping mall. Peter Lynch said, “Invest in what you know,” and there’s something to be said for an investing sector in which some research can be conducted in person.

I watched for some interesting data during a recent retail check at a major upscale mall near Fool HQ. Given retail’s slew of disappointing quarterly results recently, it’s time to look around.

Granted, my mall visit wasn’t optimal: It was daytime during a week when many kids had already gone back to school, but still, plenty of mall wanderers and super-sale signs at retailers gave me an idea of what’s moving and what’s not.

I like to look at bags. Maybe that sounds a bit creepy, but I do try to notice if shoppers bought anything and, if so, which stores seemed to have charmed them. The weirdest thing is, although it was about 2:30 in the afternoon, the bag that was by far the most popular in a crowd of shoppers who hardly possessed bags from the neighboring retailers was a shocker: Chipotle Mexican Grill, Inc. (NYSE:CMG).

Attention shoppers… and stock watchers
From checking out the food court from near and far (from an upper-tier vantage point, and fine, I also did sit down and have a burrito bowl for sustenance for the walkabout), I noticed the vast majority of people in the court were carrying, or had set, Chipotle Mexican Grill, Inc. (NYSE:CMG) bags at their tables. Other fast-food competitors’ bags or trays were few and far between.

Food court competitors at this particular mall include major options: McDonald’s Corporation (NYSE:MCD), Popeye’s, Panera, Subway, Johnny Rockets, as well as several quick-serve names I’m not familiar with, like Harry’s Smokehouse Burgers & BBQ.

Most interestingly, though, Yum! Brands, Inc. (NYSE:YUM)‘s Taco Bell is basically right next to the Chipotle Mexican Grill, Inc. (NYSE:CMG) in that particular food court. Taco Bell had no substantial line, and just a few customers trailing to its counters once in a while. Sorry, David Einhorn and other Chipotle Mexican Grill, Inc. (NYSE:CMG) skeptics, the thesis that Taco Bell would or even could steal market share from Chipotle appears to be just as outlandish as many of us believed.