December 4 (Reuters) – Chipotle Mexican Grill (CMG.N) announced on Wednesday that it has increased its menu prices by approximately 2%. The price hike comes as the fast-casual chain faces higher input costs, including increases in key ingredients like dairy, beef, and avocado. This adjustment is part of the company’s efforts to maintain margins amid ongoing economic challenges, including rising costs for restaurant operators and softer demand for dining out.
In 2023, rising inflation pushed U.S. restaurants and fast-food chains to raise prices, which in turn led to a slowdown in consumer spending. Many customers have opted for more affordable meals at home instead of dining out, contributing to the decline in restaurant demand.
Despite the previous price hikes, Chipotle executives indicated in October that the company was still experiencing low-single-digit inflation in both food costs and labor. However, due to some recent softness in demand—Chipotle’s same-store sales missed market expectations—the company had suggested that it might hold off on additional price increases until early 2025.
For now, the 2% price increase marks the first adjustment in over a year. “For the first time in over a year, we have taken a modest price increase of approximately 2% nationally to offset inflation,” Laurie Schalow, Chipotle’s chief corporate affairs officer, said in a statement.
Raymond James analyst Brian Vaccaro noted that the timing of the price increase sends a positive signal about current demand trends. In April, Chipotle had raised prices in California after the FAST Act went into effect, raising wages for workers at fast-food chains.
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