Chipotle Hikes Prices in Response to Rising Employee Wages


Chipotle Mexican Grill has raised its menu prices by roughly 4 percent to cover the costs of its decision to raise employees’ wages.

The restaurant chain announced in May that it would raise wages for its restaurant workers to an average of $15 an hour by the end of June, NBC News reported.

Company executives said that their customers would be the ones to pay the price of raising pay.

“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,” CFO Jack Hartung said at the Baird Global Consumer, Technology & Services Conference this week.

“Otherwise you’ll just lose the staffing gain.”

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There are also rising ingredient costs throughout the industry as restaurant suppliers try to manage the return of demand, but the restaurant chain currently isn’t planning to raise their prices above 4 percent.

“Ingredient costs, there’s talk about it,” Hartung said. “We’ll see where that leads.”

The price hike came as the total number of job openings reached 9.3 million in May, The Wall Street Journal reported, citing Labor Department numbers released Tuesday.

May’s job market gains were led by advertisements for jobs in hospitality and tourism, food service and loading and stocking — due to online shopping.

Do you think its fair for the consumers to pay the increased wages?

NBC reported that chains like Chipotle, Starbucks and McDonald’s have increased hourly pay in an attempt to try to attract new workers and keep current ones as consumer demand quickly came back after the pandemic.

Chipotle has also introduced employee referral bonuses of $200 for crew members and $750 for apprentices or general managers, according to CNBC.

“We are sharing with people that it’s not just a job right now, but it’s actually a job that can lead to a meaningful career,” Chipotle CEO Brian Niccol told the outlet.

“I’m glad that we’re a company that’s got the growth, and frankly the strength, to increase wages and start talking more about how the job leads to your future growth with our company.”

The chain also offers mental health care and 401(k) plans for its workers, along with “debt-free degrees.”

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Niccol said that while the company prefers not to raise prices, it made sense as the restaurant is attempting to hire 20,000 new workers across the country.

“We challenge ourselves to be on the platforms and in the places where our customers are — as well as young people that I think would be really interested in the opportunity to work at Chipotle,” Niccol said.

“Shares of Chipotle were trading up 1.3 [percent] on Tuesday,” NBC reported. “The stock has fallen more than 3 percent this year, giving it a market value of $37.72 billion.”

This article appeared originally on The Western Journal.

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