Chipotle Mexican Grill has announced that it will be increasing its menu prices once again due to inflation. The popular burrito chain had previously halted price hikes for over a year after implementing three rounds of increases in just 13 months.
“For the first time in over a year, we will be taking a modest price increase to offset inflation,” said Laurie Schalow, Chipotle’s Chief Corporate Affairs Officer, in a statement to CNBC. However, the company did not disclose the extent of the menu price increase resulting from this decision.
Despite a decrease in the rate of inflation, prices for numerous goods and services are still rising, albeit at a slower pace. According to the U.S. Bureau of Labor Statistics, the 12-month consumer price index rose by 3.7% in August, significantly lower than the 8.3% increase observed the previous year.
Chipotle initially raised its menu prices in June 2021, stating that it was necessary to cover rising wages for its employees. The chain implemented subsequent price increases in the first three months of 2022 and again in July of that year. However, as consumer spending at restaurants declined and ingredient costs stabilized, Chipotle paused its price hikes. CEO Brian Niccol mentioned in April that the company had demonstrated its ability to adjust prices, but would refrain from further increases. At the time, Chipotle’s prices had risen approximately 10% compared to the same period the previous year.
However, three months later, Niccol stated that the chain would reconsider its pricing strategy as the fourth quarter approached. This announcement comes as Chipotle’s stock has experienced a 30% increase this year, resulting in a market value of $50.1 billion. The company is scheduled to report its third-quarter earnings on October 26.
News of Chipotle’s decision to raise prices was first reported by Insider, revealing that customers can expect to pay more for their favorite burritos in the near future.