Chipotle prices (CMG) are set to rise for the first time in years as the Mexican restaurant chain increases in popularity.
Steak and pork price spikes, along with the drought in California affecting ingredients such as avocados, are partly to blame, Chipotle said.
The new price menus will be rolled out in the coming weeks, with all set by the summer.
The price increase is likely to translate to 3% to 5% — meaning potentially an extra 50 cents for an $8 burrito bowl.
Jack Hartung, Chipotle’s chief financial officer, said during a conference call with analysts that price is not the main reason customers visit its restaurants anyway. Hartung also noted that the company had earned “permission” from customers to raise prices because of that experience. And if needed, he said Chipotle still had the leeway to further raise prices without scaring off customers.
…Chipotle said sales at established locations rose 13.4 percent during the period and it raised its outlook for the year. It now expects the sales figure to grow in the high-single digits, before factoring in the price hikes.
CMG stock is up 51% from last year, but down 2% year to date.