Chipotle Mexican Grill has increased its menu prices by approximately 2% across the US, marking the first price hike in over a year, the Wall Street Journal reports.
The decision, aimed at offsetting rising costs for key ingredients like avocados, queso, and sour cream, comes as the company navigates inflationary pressures while maintaining its appeal to budget-conscious consumers.
Laurie Schalow, Chipotle’s Chief Corporate Affairs Officer, confirmed the change, stating:
“For the first time in over a year, we have taken a modest price increase of approximately 2% nationally to offset inflation.”
The price increase appears to have reassured investors, as Chipotle’s stock rose 4.5% to $63.67 following analyst reports about the move. The company’s stock has climbed more than 39% since the beginning of 2024, underscoring its resilience amid broader economic concerns.
Brian Vaccaro, an analyst at Raymond James, noted that the timing of the price hike suggests confidence in consumer demand, especially since management had considered delaying the increase if economic conditions worsened.
Channel checks by Truist Securities indicate that about 20% of Chipotle locations, primarily in the Mid-Atlantic and Midwest regions, have already implemented the price hike. Historically, the company rolls out such increases over one to two weeks, noted analyst Jake Bartlett.
Despite the higher prices, Adam Rymer, Chipotle’s Chief Financial Officer, emphasized the brand’s continued value proposition.
“Even with higher menu prices, Chipotle remains a better overall value for customers compared to similar options,” Rymer said.
He expressed confidence that loyal customers will continue to patronize the chain.
Chipotle’s leadership changes earlier this year, including the appointment of Scott Boatwright as CEO and Adam Rymer as CFO, have not disrupted its momentum. In October, the company reported robust earnings, with same-store sales increasing by 6% in the third quarter compared to the previous year. Revenue for the period reached $2.8 billion, a 13% increase year-over-year.
