Chipotle Mexican Grill announced on Wednesday that it will raise menu prices by about 2% to address the issue of rising input costs in the environment of fluctuating demand in American restaurants.
According to the China Fortune Financial App, Chipotle Mexican Grill (CMG.US) announced on Wednesday that it will raise menu prices by about 2% to address the issue of rising input costs in the environment of fluctuating demand in American restaurants.
Rising input costs have led American restaurants and fast food chains to raise menu prices in 2023, which has suppressed consumer demand. This puts pressure on restaurant operators' profit margins in the context where key ingredients such as dairy products, beef, and avocados have seen price increases. Consumers have reduced dining out and opted for cheaper at-home dining.
It is worth mentioning that executives of Chipotle Mexican Grill stated in a conference call after releasing the financial report in October that the company's inflation in sales and labor costs remains at low single-digit levels. Given somewhat weak demand trends, with Chipotle Mexican Grill's quarterly same-store sales below market expectations, the company has hinted that price increases may not arrive until early 2025.
Laurie Schalow, the corporate affairs chief of Chipotle Mexican Grill, stated in a release on Wednesday: "For the first time in over a year, we are moderately raising menu prices nationwide by about 2% to offset inflation."
Raymond James analyst Brian Vaccaro expressed in a report: "Raising menu prices at the current demand trend is also a positive signal."