Duane Beckett
In what is a complicated back-and-forth between news outlets and Chipotle, the rumors of a price increase remains a reality at this point. The increases will be in the 1% to 2% range, which doesn’t sound like much, but can quickly mount up if you’re a frequent visitor.
Delish reported on the price increase, focusing on how the company said its customers have high household incomes and can afford a price hike.
However, Chipotle pushed back on that aspect of the coverage, with Nation’s Restaurant News highlighting that the company was not raising prices because higher-income diners can handle it.
So what started this firestorm of price hikes and reasoning? It’s all down to company executives and their earnings transcript.
The stats that started this off
The origin of this story is The Motley Fool’s earnings transcript, which includes Chipotle leaders saying that roughly 60% of their core users have household income above $100,000.
The mention of a price increase comes from Adam Rymer, Chief Financial Officer (CFO) of Chipotle Mexican Grill. In the transcript, when he said that costs are staying high, he included talk of a 1% to 2% price increase.
Fox Business also covered the story, highlighting the company’s attempt to clarify misinformation, with a spokesperson saying pricing wasn’t tied to the $100K discussion in the way headlines made it sound.
According to Scott Boatwright, CEO of Chipotle Mexican Grill, the company wants to lean into the higher-income group with new occasions and ideas, while also trying to keep other customers engaged.
The reality is quite simple: costs are rising faster than pricing, and that squeezes the gap in between. For instance, in the transcript, company leaders spoke about inflation running around 3% to 4% while pricing changes are expected to be lower.
Regardless, as consumers are seeing higher bills everywhere, the mention of more expensive fast food is enough to upset people who already feel squeezed.
Whether you’re watching carbs, sodium, or spending, the practical move is simple. If the cost of fast food is too much, treat it like a luxury rather than a go-to solution for daily sustenance. Plus, always keep an eye on promotions, as they come thick and fast from all restaurants.