Are Rising Prices at Chipotle a Sign of Inflation Resistance in California?
If you’re a fan of Chipotle, you may have noticed a slight uptick in prices recently. In a recent interview with CNBC’s Jim Cramer, Chipotle’s CSO Jack Hartung discussed the impact of their price increase in California. According to Hartung, there is “macro resistance” from consumers to inflation across the industry, leading to a decrease in restaurant transactions overall.
Chipotle’s decision to raise prices in California by about 7% was in response to new higher minimum wage regulations for fast-food workers, which raised the mandated hourly rate from $16 to $20 per hour. This move positioned Chipotle in the middle of a spectrum of other restaurants that also increased menu prices.
Despite these changes, Chipotle has been performing well, beating Wall Street’s expectations in its last quarter and reporting growing market share and restaurant transactions across all income levels. One interesting insight from Hartung is the company’s use of artificial intelligence to streamline operations. Chipotle has introduced the “Autocado,” a robot that cuts, cores, and peels avocados, and another program that automates the process of creating bowls and salads. This technology aims to simplify tasks for the crew and improve their overall experience.
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