September 30, 2014

Elyria
Cloudy
62°F
test

Chipotle’s price hike to hit steak lovers harder

Chioptle Chief Financial Officer Jack Hartung noted that the chain doesn’t currently charge a whole lot more for its steak filling, even though beef costs have climbed considerably. He says Chipotle will widen the price gap between steak and chicken. (AP Photo/Gene J. Puskar, File)

Chioptle Chief Financial Officer Jack Hartung noted that the chain doesn’t currently charge a whole lot more for its steak filling, even though beef costs have climbed considerably. He says Chipotle will widen the price gap between steak and chicken. (AP Photo/Gene J. Puskar, File)

NEW YORK (AP) — Chipotle’s coming price hikes could hit steak lovers particularly hard.

The Mexican food chain said earlier this month that it plans to start charging more for its burritos, bowls and tacos in coming weeks as it faces rising costs for ingredients. On Tuesday, Chief Financial Officer Jack Hartung noted that the chain doesn’t currently charge a whole lot more for its steak filling, even though beef costs have climbed considerably.

“There’s a very narrow gap between our steak burrito and our chicken burrito. We’re going to widen that,” Hartung said at the Barclays Retail and Consumer Discretionary Conference in New York City. “We’re going to allow our customers to choose whether they want to pay the higher price of steak.”

Hartung also said the price hike would be more like 4 percent to 6 percent, or 32 cents to 48 cents, assuming the cost of a burrito is $8. In the past, executives had said they were considering a hike of 3 percent to 5 percent, or 24 cents to 40 cents. Chipotle says it will be the first national price hike in three years.

He did not specify how much more prices would rise for steak than for chicken.

Fast-food and restaurant chains are facing rising costs for beef, given the reductions in U.S. cattle inventory in recent years. In April, Hartung said Chipotle’s beef prices were up 25 percent compared with the prices it was paying in the fourth quarter of last year.

Chipotle, which has more than 1,600 locations, isn’t the only one encouraging customers to switch to chicken as the cost of beef climbs. Burger King’s head of North American operations, Alex Macedo, has also noted that the chain has been able to maintain its profitability in part by marketing chicken items more aggressively.

This week, Miami-based Burger King is bringing back its popular “Subservient Chicken” advertising campaign from a decade ago to promote a chicken version of its Big King sandwich.

Even if Chipotle Mexican Grill’s higher prices for steak push customers to trade down to chicken or other options, Hartung noted that those alternatives are more profitable for the company because the ingredients don’t cost as much.

Exactly how much of a price increase customers see at Chipotle in coming weeks will depend on where they live. The company has said the price hike should be in place by this summer.


  • Mark B

    Really , for 50¢ to $1 more im still eating steak. a person can only eat so much chicken .

    • Joe Smith

      If they raise min wage, it will jump again.

  • Sis Delish

    Bring in the Food Trucks!! Their prices won’t go up, will they?

    • golfingirl

      With the price of a gallon of gas approaching over $4.00, Food Truck prices will be going up.

  • Pablo Jones

    25% on a small part of the meal increases cost 6%. How much would the increase be if minimum wage were doubled?

    • FoodForThought63

      Actually research shows that min wage increases do not affect consumer costs. It seems like they would, I agree, but the data shows otherwise.

      • golfingirl

        How does that work?

        Costs increase, but prices remain constant?

        Not disagreeing, just asking.

      • Joe Smith

        I would like to see proof too, the main cost at a lot of places is the wage, you don’t think the owner eats the profit do you?

        Can you please post a link to this research?
        A link other than from the gov anyway, LOL

        Thanks

        • Scout

          Wages and taxes…the taxes (fed, state, local) kill businesses.

        • FoodForThought63

          You can look it up for yourself. Not being rude I just don’t have time to find the research, but I studied it for a few weeks in economics class a couple years ago.

          • Joe Smith

            I already looked it up, it does affect the consumer costs quite a bit depending on the type of company,some not as much, thanks anyway

          • FoodForThought63

            If that’s the case though you should reconsider where you place your blame-should people working their butts off for less than $10 an hour be blamed or the corporations like Wal-Mart raking in billions in profits per year, but too greedy and cheap to pay their employees a fair wage? Would you rather they pay their employees fairly or would you rather pay higher taxes for food stamps and welfare, which most Wal-mart fulltime employees qualify for? If they can’t take a negligible cut in their profits to pay their employees better and yet choose to stick it to you, the consumer, and you still side with them, well that’s your right but I don’t get it.

          • Joe Smith

            I would rather the free market decide what wages are, if it wasn’t for those “greedy” companies, these people would not have a job at all and that the gov would stop doing hand outs too, work 2 jobs like I did when I was getting low pay or get a skill.

      • Simon Jester

        Blow that right up your a**.

        Wages increase, and the cost is passed on to the consumer. Any claims to the contrary are delusional or ignorant.

  • alreadyfedup1

    Thanks OBAMA!!!!!!!!!!!!

    • golfingirl

      Hey….It’s Bush’s fault.

      (Just thought I would add that, since it is coming!)

      Actually, beef demand is high, since Lundy is buying it all for the inmates, which means we all have to pay a little more.

      • alreadyfedup1

        Yes, those state jobs serve steak. The masses must fend for themselves. Shared sacrifice according to the commie obamie..

  • stillsleepyeyes

    Hope and change……………….

    • golfingirl

      Or,

      Steak and “No Change.”

  • Guest

    Stuff really stinks up my bathroom. Gives me the squirts. Won’t eat it again….

  • guest

    I know what you mean there buddy. I stopped in there last night and this morning i let one out and it looked like golfingirls twin sister

  • Simon Jester

    No sympathy.

    They ****ed up the pinto goodness to appease a bunch of salad eating vegans. For that, I hope the burn.

  • ekwaykway

    IKEA had it right serving horse meat.