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Chipotle has raised its menu prices by up to 4 percent to cover the costs of higher wages for employees, the company’s Chief Financial Officer John Hartung announced.
“You take about a 4 percent price increase to cover the dollar cost of the extra labor,” Hartung said Tuesday at the Baird Global Consumer, Technology & Services Conference.
“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,” he added. “Otherwise you’ll just lose the staffing gain.”
The burrito chain announced last month that it would increase restaurant worker pay to an average of $15 per hour in a bid to hire 20,000 new employees ahead of the summer.
The announcement came amid similar ones from other national fast-food chains like McDonald’s — as the industry looks to quickly staff up in time for what’s expected to be a bustling summer season.
Still, many companies are struggling to recruit new workers as a fear of catching COVID-19, child-care concerns, and pandemic-boosted unemployment benefits keep potential employees on the sidelines.
As a result, the higher cost of attracting and recruiting new workers, as well as keeping current employees, is pushing many businesses to pass those costs on to consumers.
The price hikes also come amid the rising cost of ingredients and supply chain operations, further putting pressure on companies to find new ways to protect their profit.
Hartung on Tuesday left the door open to further raising prices if the cost of ingredients remains high.
“Ingredient costs, there’s talk about it. We’ll see where that leads,” he said.
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