That burrito fix is about to get a little more expensive.
Chipotle executives said Tuesday that the fast-food chain has raised menu prices by about 4 percent to cover the cost of employees’ increased wages.
In May, in an effort to hire 20,000 workers in a tight labor market, Chipotle Said It Was Raising Wages and will pay workers $11 to $18 per hour.
“We really prefer not to increase prices,” Chipotle Chief Executive Officer Brian Nichol said Tuesday at the Baird Global Consumer, Technology and Services conference. “But in this scenario it makes sense to invest in our workforce and acquire these restaurant employees and make sure we have a pipeline of people to support our growth.”
job vacancies In the United States in April hit record lows, the Labor Department said on Tuesday, the latest sign that businesses were struggling to keep hiring workers as the economy reopened. Employers added hundreds of thousands of jobs in May, but the road to recovery is bumpy for the labor market.
The labor market has forced other restaurant chains to raise wages to attract job candidates. It’s a stark contrast from earlier this year, when Congress was debating raising the minimum wage to $15 an hour, and the restaurant industry argued such a move would hinder economic recovery.
But McDonald’s chief executive Chris Kempczynski said on a call with Wall Street analysts in January that the company was doing “okay” in more than two dozen states that had phased in higher minimum wages. in May, McDonald’s Says It’s Raising Hourly Wages An average of 10 percent for current employees and entry-level pay for new employees will increase from $11 to $17 per hour, depending on the restaurant’s location. The pay increase only applies to its 650 company-owned restaurants; Most of its approximately 14,000 restaurants in the United States are independently owned.
Even with the rise in prices, Chipotle executives argued that the price of their food items remained reasonable. Barring high-priced markets such as New York, chicken burrito prices have remained below $8, Mr. Nicholl said. He said a price increase of 3 to 4 percent equates to “the quarter and dimes we’re taking”.