Inflation Alert: Chipotle Restaurant

chipotle1

Chipotle Mexcican Grill recently made headlines by going “GMO Free” on certain ingredients. I believe this announcement was more of a marketing ploy against the news in their recent financial statements. I’m not a big investor of restaurants in this day and age of the Federal Reserve printing money at a high rate and American beef in demand world wide. (Some investment advice, put your money not in the restaurant but with the beef farmer) Chipotle is hiking prices again on its customers. Within a one year time period prices on certain items will have increased 11-13%.

This write up came from TheStreet.com a week before their GMO announcement –

Chipotle stands to receive another jolt to the top line from another round of price increases. The company, which has historically been reluctant to lift prices, confirmed it will hike prices on steak and barbacoa in the third quarter by 4% to 6% in order to compensate for persistent beef inflation.

In the second quarter last year, Chipotle implemented an across-the-board menu price increase of about 7%, as it dealt with beef, dairy and avocado inflation. Same-restaurant sales growth accelerated soon after the menu price increases went into effect — after rising by 13.1% in the first quarter of last year, same-restaurant sales increased averaged 17.7% in the remaining three quarters.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s