WSJ: Chipotle Raises Prices Despite Positive Sales

The QSR is raising prices by 2% to ‘offset inflation.’

December 05, 2024

Chipotle Mexican Grill’s burritos and bowls just got more expensive, according to the Wall Street Journal. “The chain has been trying to balance higher costs for its avocados, queso and sour cream while maintaining its appeal to inflation-weary consumers looking for deals and discounts. In the end, the possible ‘modest’ price lift that the company was considering won out,” reported the WSJ.

“For the first time in over a year, we have taken a modest price increase of approximately 2% nationally to offset inflation,” Chipotle Chief Corporate Affairs Officer Laurie Schalow said.

The WSJ writes that per channel checks by Truist Securities suggest that Chipotle has so far raised its prices at about 20% of stores nationwide, mostly throughout the Mid-Atlantic and Midwest. Historically, the company has enacted its menu-price increases over the course of a week or two, analyst Jake Bartlett noted.

Chipotle’s higher prices are set to provide a boost to its future earnings, analysts said.

The company has been running under new leadership, after former CEO Brian Niccol left and was appointed chairman and chief executive officer of Starbucks. In October, Chipotle reported that same-store sales grew 6% for the three months ended Sept. 30, compared with the prior-year period. Revenue of $2.8 billion was up 13% from a year earlier.

In the fall, Chipotle announced it was partnering with Paradox to use AI for its hiring process. The company said it expects the new technology to reduce the amount of time it takes to hire an employee for an in-restaurant position by as much as 75%.

The recruiting system aims to decrease the time to hire, reduce job advertising costs, increase hiring for hard-to-fill roles and improve candidate experience, according to Chipotle.