Chipotle Mexican Grill (CMG), announced on Thursday, that it plans to increase its menu prices by 3% to 5%.
This will be the first time that Chipotle has raised its menu prices in three years. The Mexican restaurant claims that it will be raising menu prices to make up for the rising cost of food. It is also raising its prices to compensate for the cost of switching out genetically modified organisms (GMO) when possible. The chain is already moving toward using non-GMO ingredients in its meals. It has started replacing a GMO soybean oil that it used with a non-GMO sunflower oil and is also testing a non-GMO rice oil. Chipotle saw its same-store sales increase 6.2%in the latest quarter, but it also saw its operating margin decrease from 27.4% to 26.8%. Packaging cost for food and beverages rose 21% and food costs accounted for 33.6% of Chipotle’s total revenue, reports The Wall Street Journal.
Chipotle opened 37 new restaurants in its third quarter and plans to open 165 to 180 new restaurants total during 2013.
CMG shares were up 9% as of Friday morning, continuing a 61% year-to-date run.