Chipotle said it’s raising its menu prices by 2%, a rare direct admission about the impact that ongoing price increases in the economy are having on its finances.
“For the first time in over a year, we have taken a modest price increase of approximately 2% nationally to offset inflation,” Laurie Schalow, Chipotle’s chief corporate affairs officer, said in a statement obtained by NBC News.
The comment came, in part, as a response to an analyst report by Truist Securities financial group that observed the 2% increase at 20% of Chipotle locations surveyed.
Chipotle is in a period of transition after the exit of CEO Brian Niccol, who was poached by Starbucks in August. Shares of Chipotle dropped on the news of Niccol’s departure but have since climbed 23%, and are up about 42% year to date.
While Chipotle has enjoyed consistently strong earnings in recent quarters, it missed revenue forecasts in its most recent financial report. While it said traffic had remained steady — something the Truist analysts are also seeing in data on card spending — overall demand showed signs of slumping.
Chipotle also acknowledged higher food costs that came as it responded to viral online complaints about shrinking portion sizes.
Dining out has generally become more expensive in recent years. The price of food away from home as measured by the Bureau of Labor Statistics have soared more than 28% since the spring of 2020, when the Covid-19 pandemic roared to life in the U.S.
Many restaurants have seen high turnover alongside increasing costs for ingredients during that time — yet have continued to enjoy strong earnings as consumers proved willing, in select cases, to accept the higher prices if they believed they were getting good value.
In the case of Chipotle, Truist said, the company is raising prices “from a point of strength,” meaning traffic continues to be steady, according to Truist’s proprietary card-spending data. Chipotle’s overall operating costs, meanwhile, remain largely in check.
Food prices are notoriously volatile. According to the USDA, wholesale poultry prices were 4.5% lower in October 2024 than October 2023, and wholesale poultry prices are predicted to decrease 0.6% on net this year.
Yet prices for beef and veal were 1.9% higher this past October than in October 2023, and are predicted to increase faster than most other meat categories in 2024 “due to tight supplies and continued demand.”
Steve Kopack contributed.
