Healthy round of price hikes from Chipotle


Chipotle (CMG +1.2%) has been rolling out price hikes across the U.S. without any reports of widespread consumer backlash.

RBC Capital Markets sent some some boots into the streets of 11 major metropolitan markets to determine which items and locations are seeing the biggest price bumps.

Menu increases by item: Steak burrito 8.3%-10.4%; Vegetarian burrito 4%-7.2%; Guacamole 8.3%-11%; Soda 12.5% in most locations.

Overall menu prices: +6.5% for core menu items; +7.3% for side items and drinks

A look back: Chipotle's comp sales rise 13.4% in Q1

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Comments (10)
  • The_Hammer
    , contributor
    Comments (5047) | Send Message
     
    Yeah sure immune to price increases. we'll see.
    u ain't seen notting yet.
    Just saw a Spanish restaurant close its doors after 25 years in business.
    29 May 2014, 01:08 PM Reply Like
  • Deja Vu
    , contributor
    Comments (1805) | Send Message
     
    A burrito + drink each for a family of 4 now well exceeds $50 with taxes.
    Affordable it is not.

     

    As for the fact that many Chipotles are located near universities, I suspect students will see the lure of the $5 footlong over the $10 burrito.
    29 May 2014, 01:12 PM Reply Like
  • chopchop0
    , contributor
    Comments (5156) | Send Message
     
    $7+$3 drink = $10x4. Don't see how you get to $50 with that
    29 May 2014, 02:00 PM Reply Like
  • jokes21
    , contributor
    Comments (55) | Send Message
     
    I'd rather have a $10 burrito than eat a $5 foot-long and have to go home and burn my clothes from the stench. How Subway is so popular is beyond me.
    29 May 2014, 02:18 PM Reply Like
  • chopchop0
    , contributor
    Comments (5156) | Send Message
     
    "I'd rather have a $10 burrito than eat a $5 foot-long and have to go home and burn my clothes from the stench. How Subway is so popular is beyond me."

     

    CMG gives me stench in my toilet bowl instead of my clothes. Pick your poison.
    29 May 2014, 03:06 PM Reply Like
  • Deja Vu
    , contributor
    Comments (1805) | Send Message
     
    add some guacamole and see how it goes up
    29 May 2014, 03:16 PM Reply Like
  • chopchop0
    , contributor
    Comments (5156) | Send Message
     
    Their guac/chips markup is ridiculous. People on a budget probably weren't getting those in the first place. A burrito in drink will likely continue to be <$10.
    29 May 2014, 03:24 PM Reply Like
  • mobyss
    , contributor
    Comments (2595) | Send Message
     
    I'm a three-times-a-month Chipotle guy. I get a $2 drink about 75% of the time. Sometimes a water cup is good enough.

     

    I'm not going to pay over $10 for a burrito lunch, so it's water from now on. They just lost a customer for their highest margin product. So instead of getting $9.50 from me they'll get $7.50. Actually they're helping me out - water is healthier anyway, and I'm saving over 20% on my lunch! Still love those steak burritos.

     

    I'm sure I'm the ONLY one who feels this way about the price hikes...
    29 May 2014, 02:55 PM Reply Like
  • bgudgel
    , contributor
    Comments (29) | Send Message
     
    Exactly. This will hurt Chipotle's margins. The core menu items are actually a pretty good value, but $2 for a side of guacamole and $2 for a medium soda? No thanks. I order a drink basically everywhere I go except for Chipotle.

     

    It's strange and makes no sense, I admit, but I would rather pay $8 for a burrito and $1 for a drink than pay $7 for a burrito and $2 for a drink.
    29 May 2014, 03:19 PM Reply Like
  • mobyss
    , contributor
    Comments (2595) | Send Message
     
    Absolutely. Flavored water can only be sold for so much. McD's figured this out years ago and has had a $1 drink since. Chip's 12.5% increase? I'd like to see what the drink sales volumes do.
    29 May 2014, 04:42 PM Reply Like
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