Newport Beach, CA – Chipotle Mexican Grill has announced a nationwide price hike, citing inflation and a commitment to offering more generous portion sizes.
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Laurie Schalow, Chipotle’s Chief Corporate Affairs Officer, confirmed Friday that the California-based restaurant chain is implementing a 2% price increase across its U.S. locations. This marks the company’s first price adjustment in over a year.
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Details of the Price Increase
The price hike follows an analyst report by Truist Securities, which earlier this week noted a 2% increase at approximately 20% of Chipotle’s 3,500 U.S. restaurants. Truist also raised its price target for Chipotle shares and reported accelerated customer traffic in November.
In October, Chipotle highlighted rising costs for food, beverages, and packaging during its third-quarter financial report. The price of avocados, a key ingredient in many of its menu items, was particularly affected by supply chain disruptions.
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Impact of Avocado Shortages
Avocado shipments from Mexico to the U.S. were briefly suspended in June after two U.S. Department of Agriculture employees were assaulted and temporarily detained in Michoacán, a key avocado-producing region. The suspension contributed to rising costs that Chipotle now aims to offset.
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Responding to Portion Size Complaints
Chipotle also attributed the price increase to its efforts to deliver consistent portion sizes. Earlier this year, customers took to social media to complain about reduced portions, prompting the company to retrain staff at about 10% of its locations.
Former Chairman and CEO Brian Niccol addressed the issue in July, emphasizing the importance of meeting customer expectations. Niccol left Chipotle in September to assume leadership roles at Starbucks, which has pledged not to raise prices through September 2025.
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Broader Industry Trends
The price of food consumed away from home has surged 30% between October 2019 and October 2024, according to U.S. government data. By comparison, the cost of food prepared at home increased 27% during the same period.
Restaurant chains have struggled to balance rising operational costs with consumer demand. Earlier this year, McDonald’s reported a shift in customer behavior, with more diners opting to eat at home due to higher prices. In response, McDonald’s introduced a $5 meal deal and other discounts to retain budget-conscious customers.
Looking Ahead
Chipotle’s decision reflects the broader pressures facing the restaurant industry as inflation continues to weigh on consumers and businesses alike. Whether customers will embrace the company’s commitment to portion sizes amid rising prices remains to be seen.
For more updates on food industry trends and consumer impact, stay tuned.
