Chipotle Mexican Grill has increased menu prices by about 4 percent to cover the cost of raising its workers’ salaries.
In the restaurant chain, chains such as Chipotle, Starbucks and McDonald’s are increasing hourly wages for employees in company-owned positions in an effort to attract new employees and keep their current ones. Consumer demand returned to restaurant dishes, but the workforce returned more slowly, pushing restaurants to sweeten the deal. In May, the entertainment and hospitality industries added 292,000 jobs, but employment in those areas is still declining by 2.5 million from pre-pandemic levels, according to the labor ministry.
In May, Chipotle said it would raise hourly wages for its restaurant workers to an average of $ 1
“It feels like the right thing, at the right time, and it feels like the industry will now have to either do something like that or play catch-up,” CFO Jack Hartung told a virtual conference. “Otherwise, you will simply lose the profit from the staff.”
CEO Brian Nicole said the company prefers not to raise prices, but that the move makes sense in this scenario.
The timing of the rise in prices coincides with rising costs for ingredients in the restaurant industry as suppliers struggle to return demand. For now, Chipotle does not plan further price increases.
“Ingredient costs, that’s what we’re talking about. We’ll see where that leads, “Hartung said.
Chipotle shares traded up 1.3 times on Tuesday. Shares fell more than 3 percent this year, giving it a market value of $ 37.72 billion.