Your Chipotle burrito might cost more next time you visit.
Executives at the Denver-based burrito chain announced the companywide menu price hike this past Thursday. The price increase is the first in three years. According to Reuters, the price increase is spurred by escalating costs for expensive ingredients like steak, avocado and cheese.
The Wall Street Journal reports that the recent drought in California has driven up avocado prices. The dwindling cattle supply has also increased beef costs. In a Businessweek report, Chipotle’s Chief Financial Officer John Hartung commented that steak prices alone have risen 25 percent in the last three months.
Despite strong sales in the past year and Chipotle recently announcing an 8.5 percent increase in net income, the decision by Chipotle executives to increase prices was made to manage rising food costs that were delving into the burrito chain’s profit margins.
So, how and when will the price increase take place?
Reports are that the price hike will increase prices by a single-digit range and will likely take place in all markets by Chipotle’s third quarter.
Twitter reaction to Chipotle’s price increase has been mild. The company’s commitment to serving quality ingredients, nearly one-hundred percent free of any genetically modified ingredients, has engendered a loyal following to its “Food with Integrity” efforts:
Jack Base @base_jack Chipotle's price increase will not affect my rate of consumption whatsoever.
Nation Restaurant News reports that Chipotle is on pace to open 180 to 195 stores later this year.
Chipotle maintains three locations in Raleigh.