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Chipotle raises menu prices by 2%, blames inflation; what it means for customers

By Austin Williams
Published  December 5, 2024 7:05pm EST
Food and Drink
FOX TV Digital Team

Robots could be making your Chipotle bowls, salads soon

Chipotle has announced it is testing out a robot that can make bowls and salads to make their fast food service even faster. (Credit: Chipotle)

The Brief

    • Chipotle has raised menu prices by 2%, citing inflation and rising ingredient costs.
    • The hike follows earlier regional price increases in California due to wage laws.
    • The chain continues to address concerns over portion sizes after scrutiny this summer.

LOS ANGELES - Chipotle Mexican Grill announced a 2% nationwide price increase on Wednesday, citing rising costs for ingredients like beef, dairy, and avocados, Reuters reported. The move comes as inflationary pressures strain restaurant margins, prompting many consumers to cut back on dining out.

"For the first time in over a year, we have taken a modest price increase of approximately 2% nationally to offset inflation," said Laurie Schalow, Chipotle’s corporate affairs chief.

Why did Chipotle raise prices?

Inflation has driven up costs for ingredients and labor, squeezing margins across the industry. In California, Chipotle also faced increased costs earlier this year due to the FAST Act, which raised wages for fast-food workers.

Initially, Chipotle suggested any price hike might be delayed until 2025, but this adjustment signals a proactive move to address inflation while maintaining profitability.

What it means for customers

The 2% increase is Chipotle’s first national price adjustment in over a year and comes as many consumers are tightening their budgets. Analysts believe the timing may reflect steady demand trends, with the hike signaling confidence in the chain’s financial outlook.

FILE - Chipotle restaurant workers fill orders for customers.

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Addressing concerns over portion sizes

The price hike coincides with lingering criticism over portion sizes. Earlier this year, customers accused Chipotle of "shrinkflation" on social media, prompting CEO Brian Niccol to reaffirm the chain’s commitment to generous portions.

"There was never a directive to provide less to our customers," Niccol said, adding that the company has increased training to ensure consistent portion sizes across its 3,500 locations.

What’s next for Chipotle?

Chipotle faces the ongoing challenge of balancing profitability with customer satisfaction. While the price hike may frustrate some diners, the chain’s focus on portion consistency could help reassure customers that they’re still getting value for their money.

The Source: This story is based on reporting by Reuters and previous reports from LiveNOW from FOX.