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Avocados and salsa are getting expensive
Don't be surprised next year if your burrito bowl at Chipotle is a bit pricier.
Beware Chipotle lovers, there may be an across-the-board price increase in 2014, according to Reuters.
Chipotle founder and CEO Steve Ells announced during an investor conference call that next year menu prices may increase anywhere from 3 percent to 5 percent. The reason for this is because they have to keep up with the price increase of California avocados and salsa. In addition, non-GMO meats, cooking oil, and tortillas can be costly.
Why are people so in love with the fast-food Mexican grill? Their menu offers burritos, burrito bowls, crispy tacos, soft tacos, salads, chips and guac, and a kid’s menu where you can customize your toppings. Chipotle caters to carnivores, vegetarians, and those looking to eat light. The prices vary depending on how many toppings you wish to have.
Its popularity is increasing, with a profit increase of 15 percent in the past year. Executives thank the animated film and arcade-style game on Facebook, Twitter, and YouTube for this.
Fast Food Prices Are Skyrocketing For This Reason
If you've found yourself eating from your local fast-food joints more often during the pandemic, you're in the company of millions of other Americans. Fast food was one of the most reliable options for takeout and delivery in 2020, as dine-in restaurants were forced to operate in a limited capacity and, sometimes, shut down altogether.
Another reason we've been flocking to the fast-food chains is their reasonable pricing, which often provide the best value meals for cash-strapped families during an economic downturn. But if this has been your main reason for ordering fast food, you may want to rethink your budgeting strategy. According to new government data, fast-food prices have undergone the highest rate of inflation since 2008, and are now much higher than they were a year ago.
Data shows that prices at limited-service restaurants skyrocketed by 6.2% year-over-year compared to full-service restaurants (those with wait-staff and dining rooms), which increased by 2.9%. (Related: McDonald's Is Making These 8 Major Upgrades.)
According to Restaurant Business, the price surge can be attributed to higher demand. Fast food drive-thru and delivery options, in particular, saw a surge at chains like Chick-fil-A, McDonald's, and Domino's. Incremental price increases, then, were less likely to threaten the livelihood of those businesses versus full-service businesses, which struggled with a major decrease in customers.
Another factor affecting the pricing of fast food is an increase in wages at fast-food restaurants. To retain untipped workers and match higher wages at companies like Walmart, Target, and Costco, chains were forced to raise menu prices.
Delivery via third-party apps will also tack on additional charges to a fast-food order. If you get your Chipotle order on DoorDash, for example, you'll pay 13% more than at a Chipotle location. At Noodles & Co., the difference is 15%.
According to Restaurant Business's Jonathan Maze, these factors end up making fast-food delivery as expensive as an order from some full-service restaurants.
For more on fast-food trends, check out 6 Most Anticipated Fast-Food Menu Items Launching This Year, and don't forget to sign up for our newsletter to get the latest restaurant news delivered straight to your inbox.
An employee prepares a burrito bowl at a Chipotle Mexican Grill Inc. restaurant in Louisville, Kentucky
Critics of minimum wage increases suggest they will raise costs, kill jobs, and put companies out of business.
Are they right? To find out, I looked for a company that employs a lot of minimum wage workers to see what impact a $15 an hour wage would have on its bottom line. I chose Chipotle Mexican Grill .
I’m not trying to pick on Chipotle. But it’s a company that can tell you a lot about the way wage increases will ripple through a company, and the economy at large. It helps that Chipotle’s annual income statements are filed with the Securities and Exchange Commission and are audited. Chipotle, with nearly 88,000 employees, is also one of the few chain restaurant companies with no franchisees, which can muddy the waters when you are taking apart an income statement.
Here’s what I found: With a $15 minimum wage, a chicken burrito that now costs $7.35 in many locations would cost about $7.86, or about 7% higher. The company would earn the same level of profits it made in 2020 under the current minimum wage structure.
Fifty-one cents is not a big ask. It’s really quite small if what it’s financing is the ability of workers on the lowest rung on the economic ladder to earning a living with what work their circumstances allow.
To calculate this price increase, I had to estimate what part of Chipotle’s labor costs go to minimum-wage workers. (This information isn’t public, and the company didn’t respond to my requests for comment.) The 80/20 rule explains a lot of business and economic phenomena, and based on what I saw at my local Chipotle, it seemed like a tenable place to start. With total labor costs of $1.6 billion in 2020, if 80% goes to workers who earn less than $15 an hour, that puts Chipotle’s minimum-wage labor cost at $1.3 billion.
Next, I estimated the prevailing wage to see what kind of cost increase Chipotle would suffer with a $15 wage standard. Employment websites suggest the starting wage at Chipotle is $11.28. Therefore, to pay everyone at least $15 an hour, Chipotle would have to raise those wages by about 33%.
So, taking into account the 33% increase, additional Social Security contributions Chipotle would need to pay on behalf of workers, and keeping the other 20% of the wage pool (about $319 million) constant, that delivers a total labor cost of just a tad over $2 billion. In the end, labor costs would rise about $413 million. To keep operating profits the same, revenues, AKA prices, would need to increase by 7%.
The absolute accuracy of this analysis is less important than what it reveals: An increase in the minimum wage that is very large in absolute terms is less significant within the context of a corporate cost structure.
If I can figure this out, surely Chipotle knows the impact of a $15 minimum wage.
In fact, Chipotle executives can discover a whole lot more. Thanks to modern, cloud-based enterprise software, they can know, down to the basis point, the profit per menu item, who is ordering, when they order, how they order, what they last ate at a Chipotle restaurant, and a lot of other things it’s probably too frightful to consider.
And because it knows so much, Chipotle has the wherewithal to raise prices strategically. Or it could shrink the product ever so slightly—which even old-line cereal companies figured how to do more than a decade ago—or squeeze suppliers or change prices dynamically by location or at times when they are more elastic.
It’s easy to drum up opposition to minimum wage increases by trotting out a 33% increase in wages, which, yes, in absolute value terms is large, but much smaller once it hits the top or bottom line. Ultimately, businesses have many levers to pull to control costs without touching their workers. But all this is a bit more nuanced than the current, pitched battle over the politics of wages seems ready to absorb.
And let’s not forget that given the nuances of accounting, net profits are not the same as the cash the company generates. Chipotle’s depreciation and amortization expense on its income statement is not a cash expenditure, but an accounting adjustment, which along with other adjustments showed there was nearly $130 million in cash sloshing around in Chipotle for 2020 that did not show up in reported profits. In 2019, this figure was more than $300 million. Much of the cash Chipotle needs to raise wages to $15 per hour is already on hand, meaning prices don’t necessarily need to rise even by 7%.
So, a $15 wage is not a social problem. It’s a business problem. No need to complicate things with politics or cultural divides. Instead, let’s have a little faith. American businesses have a pretty good track record for ingenuity.
Why, then, doesn’t Chipotle raise its prices 7% and do what many think is the right thing? Perhaps because it operates in a hypercompetitive business and does not want to be disadvantaged versus McDonald’s, Qdoba, or any other restaurant that would figuratively love to eat its lunch.
But lurking behind this argument is regressive thinking. It’s a belief that Chipotle’s ultimate net profit margin for 2020 of 5.9% sets the baseline for future profits, from which there can be no retreat, even if this profit margin is subsidized by low-wage workers who cannot live off their labors.
Further, this thinking ignores that things change, or in the case of minimum wages, should change. Someday, a $7.25 minimum wage in 2021 may seem as outdated and unfair as the idea that women shouldn’t vote. Until then, let’s do the right thing by pulling the trigger on the minimum wage now, and let business owners sweat the details later.
Yes, sweat. That’s what they’re paid to do, and they are paid a lot more than minimum wage to do it.
[UPDATED] Chipotle Will Cost You More, Starting Next Month
That forearm-sized burrito's about to cost you an arm and a leg. Well, depending on how much you value an arm and a leg. After posting lackluster sales and earnings on Tuesday, the company announced it would raise prices on its meals by about 5 percent, starting this November.
The price increase will affect about 900 stores nationwide, Reuters reported, and the company will open fewer stores than they originally projected for the year.
ORIGINAL POST: April 19, 2017 at 1:22 p.m. EST
Chipotle warned us about a potential price increase months ago. But back in January, top brass at the company said they would slowly hike price tags slowly over time. Since then we haven't been sure when our wallets would feel the full effects. But now we do.
The new price tags have officially been put into place in 440 locations &mdash which means, if you live in a city where labor costs are high, (i.e. major cities with a high minimum wage like Washington, D.C.) you can expect to see a leap in the cost of your burrito next time you head to Chipotle.
According to Fortune, prices have quietly increased by about 5 percent across the board in these stores. For most menu items, that amounts to less than a fifty cent increase, but hey, those quarters could be going to guac, right? (Time to start trying out our money-saving ordering hacks!)
But it doesn't stop there. More markets may see price increases throughout 2017, Eater reports. However there is a glimmer of good news: the price hikes "were never intended to be a system-wide increase," a Chipotle spokesperson said.
These financial changes come after a shaky year for Chipotle, with a decrease in restaurant sales, foodborne illnesses in more than dozen states, and ingredient shortages. Here's hoping 2017 is a better year for the Tex-Mex brand, so we can keep enjoying our cheesy burrito bowls in peace.
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Most Popular Restaurant's Secret Menus, Nutritional Info, Prices, etc.
We feature the latest fast food menus like McDonald’s menu prices, Panda Express menu prices, and and even Papa Johns menu prices. These restaurants offer secret combinations and additions that revolutionize the dining experience. Check out the nutrition facts behind your favorite meals and sides, full menus and prices, along with full secret menus and descriptions of each item.
For decades your choices at your favorite restaurants were limited to what was on the menu. If it wasn’t listed in black and white on the menu, you would have a hard time ordering it. The increasing popularity of secret menus has changed all of that. We finally found a whey protein powder we can recommend if you want to boost up any of your secret menu experiences. Secret menus are unofficial and unadvertised items on menus at restaurants around the world that allow you to customize what you eat to serve your unique taste buds. Secret menus items are passed from person to person through word-of-mouth. At SecretMenus.com, we compile secret menu items from people just like you. The community then votes and weighs in on items to make sure the best always comes out on top!
How to Order from the Secret Menu
Ordering from secret menus is not hard but you should follow some basic rules. Since secret menu items are no on the official menu, when you order, you should know not just the name of the item, but also the recipe. It’s a good idea to have the page loaded on your phone, so that way when you are in the store, you’re ready to order your favorite secret menu item. Occasionally, some secret menu items will cost a little bit more because of additional ingredients, but most of the time, you will be getting more for the same price.
Prices Shift as You Make Changes
If you wrapped the filet in bacon and topped it with herb butter, your costs would increase. This change might make that $25 price point more appropriate. Remember, everything that goes onto the customer's plate must be accounted for.
Let's say this drives your food costs up so that the total cost to you for this meal is now $15.50. At a menu price of $25, this would have a similar effect to dropping the price to $24 without adding the bacon and herb butter. You're still at 38%, which is respectable. But your customers might be a lot happier with this embellished meal, and word of mouth is everything.
Chipotle: The Definitive Oral History
The builders of a $22 billion burrito empire—the founder, his father, his college buddies, key execs, and a couple of pig farmers—open up about how they won the fast-food future. And yes, they dish about McDonald's.
By Kyle Stock and Venessa Wong | February 2, 2015
By restaurant industry standards, Chipotle Mexican Grill does countless things wrong. Its outlets aren’t in the busiest locations. It spends too much money on food. It doesn’t serve breakfast it doesn’t do drive-throughs, franchises, or even much in the way of advertising. It almost never adds anything new to its menu. Employees still cut all the tomatoes — hundreds of thousands of pounds a day — by hand. It is, in so many ways, the anti-McDonald’s.
Which is strange, particularly when you consider that Chipotle spent roughly eight years under McDonald’s corporate arches. McDonald’s early investment in the burrito chain gave it capital to grow, an inside look at ultra-efficient supply-chain economics, the know-how it needed to manage its expansion from 13 stores in 1998 to almost 500 in 2006. For its investment — roughly $340 million by the time of Chipotle’s initial public offering — McDonald’s got a nice little return. It turned out to be the short end of the stick.
In the years since their split, Chipotle’s rapid growth and consistently astonishing financial results have made it a darling of investors. Its commitment to fresh, high-quality ingredients at only slightly higher prices has helped to define a new wave of “fast casual” dining. And McDonald’s … well, everyone knows what’s happened to McDonald’s. As consumers’ tastes changed, the chain became the poster-child for America’s obesity epidemic. Sales slumped, and, recently, the stock price followed. Last week, McDonald's announced that Chief Executive Don Thompson would step down on March 1 and be replaced by Chief Brand Officer Steve Easterbrook. The incoming CEO has one job: to get the iconic chain back on some kind of track at a time when Chipotle and its disciples are ascendant.
The story of Chipotle’s meteoric rise is also the story of McDonald’s failure to adapt to the changing American appetite. To understand both, we interviewed dozens of people Interviews have been condensed and edited involved with Chipotle, from its inception in founder and CEO Steve Ells’s Colorado dining room through its time at McDonald’s to today. McDonald’s declined to make current leaders available for this story, but we were able to talk to many of the company’s former executives, including several who now work for Chipotle. (All interviews have been condensed and edited.)
In Ells’s telling, the company has thrived on high-quality food and engaged workers — and because Ells created a highly efficient way to cook, one that had nothing to do with the established, freeze-heat-and-serve fast-food model. The funny thing is, Ells never really wanted to spend much time in the burrito business at all.
Does Chipotle Have WiFi?
There are many locations that do not have free Wi-Fi. We have heard reports of ones that do, but these are few and far between. In fact, if you look at reviews of many Chipotle locations in the US, you will see a lot of negativity surrounding their lack of free wi-fI.
Seems a bit harsh to focus on something like this in a restaurant famed for fast food, but when you consider that chains like Starbucks and Dunkin’ Donuts both have free Wi-Fi across the board, you begin to understand why it is a problem and why Chipotle are lagging behind the competition.
This Is What Trump's Tariff on Mexican Goods Could Mean for Chipotle
Chipotle could "bear the biggest brunt" of this potential 20 percent tariff.
If you already roll your eyes at the thought of paying extra for guac at Chipotle, get ready for the possibility of it getting even more expensive, along with the rest of the menu.
Trump is proposing a 20 percent tariff on goods from Mexico &mdash which would potentially be used to pay for a wall along the U.S.-Mexico border &mdash and top restaurant industry analyst Mark Kalinowski told Business Insider that Chipotle could "bear the biggest brunt" of it.
The tariff would make Mexican goods more expensive for American consumers, creating problems for any restaurant chain that relies on Mexican imports. But, because of the quantities Chipotle imports from Mexico, Kalinowski believes the chain would be affected more so than other companies in the restaurant business.
"Our belief is that the company generally obtains about 70 to 90 percent of its avocados from Mexico, all of its limes, the majority of its jalapeños, less than half of its tomatoes, and small amounts of other items (e.g., cilantro)," Kalinowski wrote.
The analysis suggests that the tax would have to pass a price increase on to customers in order to offset the higher cost of goods. At a time where Chipotle is still recovering from the losses it took after an E.coli outbreak in 2015, this potential price raise could be problematic for the company.
Chipotle declined to comment on the possible effects the tax could have, saying that it's "purely speculative."
But it isn't clear that Trump even has the authority to enlist the tariff. In an interview with The Atlantic, Douglas Irwin, an economist at Dartmouth University who specializes on U.S. trade, says, "Under the Trade Act of 1974, the president is allowed to impose 15 percent tariff for balance-of-payments purposes and only for 150 days." Other economic analysts have suggested this tariff could violate World Trade Organization rules and possibly spark a trade war with Mexico. It's also not clear whether or not the Trump administration will pursue the 20 percent tariff. White House Press Secretary Sean Spicer told reporters, "we could go in another direction."
If you oppose the tariff, you can get involved by calling or emailing your elected officials.
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Sulfite Allergy-Friendly Foods
For those who need to avoid sulfites, Chipotle lists only four items that contain sulfite ingredients: the soft flour tortilla, sofritas, quesos, and the vinaigrette dressing. Steer clear of those four items (you can substitute a corn tortilla taco for the flour tortilla) and you should be fine.
A Word From Verywell
When it comes to quick-service restaurants, Chipotle is a great alternative: the restaurant chain doesn't use five out of the eight most common allergens, and its food is easily customized, making it a simple task to alter menu items to eliminate milk, wheat, or soy ingredients from your meal.
Chipotle warns that any of its allergenic food items can come into contact with your food since it doesn't have dedicated allergen-free kitchen spaces to prepare allergy meals. It also notes that even though it doesn't use eggs, mustard, peanuts, tree nuts, sesame, shellfish, or fish as ingredients in its menu items, it can't guarantee the complete absence of those allergens from its foods, since it gets ingredients from outside suppliers.
To guard against cross-contact with foods to which you're allergic, you can ask for a manager to prepare your meal.