“There’s a very narrow gap between our steak burrito and our chicken burrito. We’re going to widen that,” Hartung said at the Barclays Retail and Consumer Discretionary Conference in New York City. “We’re going to allow our customers to choose whether they want to pay the higher price of steak.”
Hartung also said the price hike would be more like 4 percent to 6 percent, or 32 cents to 48 cents, assuming the cost of a burrito is $8. In the past, executives had said they were considering a hike of 3 percent to 5 percent, or 24 cents to 40 cents. Chipotle says it will be the first national price hike in three years.
He did not specify how much more prices would rise for steak than for chicken.
Fast-food and restaurant chains are facing rising costs for beef, given the reductions in U.S. cattle inventory in recent years. In April, Hartung said Chipotle’s beef prices were up 25 percent compared with the prices it was paying in the fourth quarter of last year.
Chipotle, which has more than 1,600 locations, isn’t the only one encouraging customers to switch to chicken as the cost of beef climbs. Burger King’s head of North American operations, Alex Macedo, has also noted that the chain has been able to maintain its profitability in part by marketing chicken items more aggressively.
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