Chipotle Mexican Grill is making a major change that may see you shelling out a few extra bucks for that mouth-watering burrito. On Tuesday, the company's Chief Financial Officer John Hartung confirmed that the beloved restaurant chain has hiked the prices on its menu. Hartung said the menu prices have increased by about 3.5% to 4% to cover the cost of raising its workers' wages.
Confirming the price hike at the Baird Global Consumer, Technology & Services Conference, according to CNBC, Hartung explained that "it feels like the right thing, at the right time, and it feels like the industry is now going to have to either do something similar or play some kind of catch-up. Otherwise you'll just lose the staffing gain." As the outlet notes, the increase in hourly wage, which was first announced back in May, comes as many fast-food chains begin to reopen dine-in services. However, as consumer demand begins to return, the workforce has been slower to do so. The Department of Labor reported that in May, the leisure and hospitality industries added 292,000 jobs, though employment in those fields is still down by 2.5 million compared with pre-pandemic levels. As a result, many of those in the restaurant industry are attempting to attract labor with higher wages, with McDonald's announcing last month that it would increase hourly pay for workers at its company-owned stores.
The pay increase also comes amid an increase in ingredient prices. Business Insider reports that the price of numerous staple goods, including corn and avocados, has risen over the past few months as shipping delays meet rising demand. Hartung acknowledged this Tuesday, stating, "ingredients costs, there’s talk about it. We'll see where that leads."
Business Insider reports that the roughly 4% price hike means the average Chipotle meal will cost about 30 to 40 cents more. While this will likely lead to some upset among fans of the chain, they shouldn’t be expecting to see another hike anytime soon. A spokesperson told the outlet that the current increase was "designed to help offset a wage increase," and Hartung said Tuesday the company does not plan to have any further increases in the near future. The increase, meanwhile, has had some benefit for Chipotle stock. After the price increase was announced, Yahoo Finance reports Chipotle's stock price rose 1%, adding to a 30% gain over the past year.