Chipotle has raised its menu prices by up to 4 p.c to cover the prices of upper wages for workers, the company’s Chief Financial Officer John Hartung introduced.
“You take about a 4 percent price increase to cover the dollar cost of the extra labor,” Hartung stated Tuesday on 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 introduced final month that it could improve restaurant employee pay to a median of $15 per hour in a bid to hire 20,000 new workers forward of the summer time.
The announcement got here amid related ones from different nationwide fast-food chains like McDonald’s — because the trade appears to rapidly workers up in time for what’s anticipated to be a bustling summer time season.
Still, many corporations are struggling to recruit new employees as a worry of catching COVID-19, child-care considerations, and pandemic-boosted unemployment advantages preserve potential workers on the sidelines.
As a consequence, the upper value of attracting and recruiting new employees, in addition to preserving present workers, is pushing many companies to cross these prices on to shoppers.
The value hikes additionally come amid the rising value of elements and provide chain operations, additional placing strain on corporations to discover new methods to defend their revenue.
Hartung on Tuesday left the door open to additional elevating prices if the price of elements stays excessive.
“Ingredient costs, there’s talk about it. We’ll see where that leads,” he stated.