Chipotle hikes prices to cover the cost of raising wages

0
118


A worker sprinkles cheese on a burrito at a Chipotle Mexican Grill restaurant in Hollywood, California.

Patrick T. Fallon | Bloomberg | Getty Images

Chipotle Mexican Grill has hiked menu prices by roughly 4% to cover the cost of raising its staff’ wages.

Across the restaurant trade, chains equivalent to Chipotle, Starbucks and McDonald’s have been growing hourly pay for employees of company-owned locations in a bid to attract new workers and retain their present ones. Consumer demand has come roaring again for restaurant meals, however the workforce has been slower to return, pushing eateries to sweeten the deal. In May, the leisure and hospitality industries added 292,000 jobs, however employment in these fields continues to be down by 2.5 million in contrast with pre-pandemic ranges, in accordance to the Department of Labor.

In May, Chipotle mentioned that it would raise hourly wages for its restaurant workers to attain a median of $15 an hour by the finish of June. Company executives mentioned at the Baird Global Consumer, Technology & Services Conference that they might be passing alongside the value of raising pay to customers.

“It appears like the proper factor, at the proper time, and it appears like the trade is now going to have to both do one thing related or play some variety of catch-up,” CFO Jack Hartung mentioned at the digital convention. “Otherwise you will simply lose the staffing acquire.”

CEO Brian Niccol mentioned the firm prefers not to increase its prices however that the transfer made sense on this situation.

The timing of the value hikes coincides with rising ingredient prices throughout the restaurant trade as suppliers grapple with the return of demand. For now, Chipotle is not planning on additional value will increase.

“Ingredient prices, there’s speak about it. We’ll see the place that leads,” Hartung mentioned.

Shares of Chipotle had been buying and selling up 1.3% on Tuesday. The inventory has fallen greater than 3% this yr, giving it a market worth of $37.72 billion.



Source link