Chipotle Plans To Raise Its Prices Even More This Quarter
Chipotle's prices have steadily ticked up in recent years in a trend that has become a major frustration point among its fans. Unfortunately, any customers who've been hoping for some relief on their Chipotle bills will be sorely disappointed in 2024.
After releasing its results for the fourth quarter of 2023 and the full year on Feb. 6, Chipotle executives held an earnings call where they revealed that prices will increase from between 2.5% and 3% in the first quarter of 2024. This means your Chipotle burritos, bowls, and tacos are about to get even pricier—if they haven't already.
Chipotle expects to raise its prices even more later in 2024 due to an upcoming fast-food minimum wage increase in California, under which workers will make at least $20 an hour starting on April 1. Several major fast-food chains that operate in California, including Chipotle, McDonald's, and Jack in the Box, have already indicated that they plan to increase prices in response to the minimum wage hike, the Wall Street Journal reported.
However, just how much Chipotle's prices will increase because of the wage boost has yet to be determined. Chipotle CFO Jack Hartung said during the Feb. 6 earnings call that the company is trying to decide between raising them just enough to break even, or raising them a little extra to protect its margins.
"We haven't decided within that range. We'll wait and see just what the landscape looks like, what the consumer sentiment is, what other companies are going to do," Hartung added.
Chipotle's upcoming 2024 price increases will follow several similar hikes throughout the past couple of years, which the chain has blamed on higher operating costs and inflation. Chipotle confirmed to CNN in October 2023 that it was implementing a "modest price increase to offset inflation." Before that, it raised its prices about 3.5% to 4% in June 2021. It also revealed in October 2022 that its prices were about 13% higher compared to a year prior, per CNN.
Customers have been sounding off against Chipotle on social media over the price increases—and some even say they've stopped eating there altogether.
"I haven't been in months. The price and value [aren't] there," one customer wrote in a 2023 Reddit thread about the price hikes.
But despite the widespread criticism, earnings data shows that Chipotle is having no trouble bringing customers into its stores. The chain raked in $9.9 billion in total revenue in 2023, a 14.3% increase compared to 2022. It also reported an impressive 7.9% increase in same-store sales for 2023 and opened 271 new restaurants, bringing its total store count to 3,437 by the end of the year.
And it's not just higher-income customers that are flocking to Chipotle in droves. The chain has been seeing sales growth from guests at all income levels, Chipotle CEO Brian Niccol said during the latest earnings call.
"Clearly, the brand is resonating in a meaningful way," he added.
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