Chipotle Mexican Grill, the fast/casual restaurant that prides itself in serving "food with integrity" is stating that food costs and other operating costs have risen for the chain -- and they might pass those additional costs on to you -- the consumer.
In a presentation at the 2013 ICR XChange yesterday, the Chipotle leaders gave a presentation to investors regarding the company's financial status and future plans.
Chipotle founder Steve Ells talked of the company's commitment to respecting farmers, the environment and animals. He also spoke about the company's dedication to its employees by creating a "people culture" that rewards and elevates leaders at the company's 1,400 locations, and plans for international expansion of the Chipotle brand.
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After all the feel-good comments were over, CFO
Jack Hartung took the microphone to lay out the financial status of the
company, explaining that operating costs had increased. While some
costs were attributed to marketing, Hartung honed in on higher food prices, especially dairy and meats (though he did note a small surge in
He then said that the company was "open to the
idea of a menu price increase" and that it was "more likely that we'll
raise prices in 2013", though consumers probably won't see an increase
until the middle of the year.
While it's good to see a company
not changing the bottom line by substituting lower quality ingredients
in their food, it's also a little tough
to see a company that boasts a fourth quarter revenue of $699.2
million and opened 183 new restaurants in 2012, pass on additional costs to a
loyal consumer base.
Whether the price increase happens remains
to be seen. For now, we'll frequent the burrito place that treats its
suppliers, employees, and animals with dignity.
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