Chipotle says it may need to tick its food prices up
Chipotle, which just announced price hikes, said it will likely charge even more at its California restaurants, blaming a new law that raises minimum wages for fast food (and fast casual) workers in the state.
During an analyst call discussing the company’s third quarter results Thursday, John Hartung, Chipotle’s chief financial officer, said “we haven’t made a decision” on pricing.
It would be a mid- to high single-digit price increase to cover the dollar cost and/or margin of that,” he explained. “We will definitely pass this along.”
According to a Chipotle spokesperson, the company has not yet decided whether it will raise prices in California.
California Gov. Gavin Newsom signed legislation in September that raised the minimum wage for fast food workers to $20 an hour, and created a council that can approve further increases. As of January 1, the minimum wage in the state will increase to $16 an hour from $15.50. Around 15% of Chipotle’s roughly 3,300 locations in California pay employees $17 an hour.
It will take effect on April 1 of next year when the new hourly wage for fast food workers takes effect. The program is open to employees of fast food restaurants with at least 60 locations nationwide.
Chipotle has been able to raise its prices without much consequence, even as some consumers cut back on spending.