After news broke that Chipotle is set to raise prices for the fourth time in two years, fans on Reddit are saying they’ll take their business elsewhere.
“Bye. Was teetering on going back, but not now,” a Redditor wrote on r/Chipotle, where fans criticized the price increase.
When Cheapism reached out to Chipotle to find out more information, the company shared the following statement from its Chief Corporate Affairs Officer, Laurie Schalow: “For the first time in over a year, we will be taking a modest price increase to offset inflation.” In the email, the chain failed to address when or by how much it plans to bump prices, noting that it's in a quiet period ahead of its third-quarter earnings report.
But consumers don’t seem to care about the details. No matter how "modest" the increases are, consumers are against price hikes at Chipotle in principle.
Declining Quality, Rising Prices
“There needs to be better quality control behind these restaurants before they can raise their prices,” one comment reads. “Give people what they are already paying for first.”
Redditors echoed this sentiment throughout the thread: Chipotle is raising prices while its quality, portion sizes, and customer service have declined.
“Portions have significantly diminished, staff acts like the portions are coming out of their pockets, quality has gone to sh**, and a meal for 2 is almost $30…” another Redditor shares. “Chipotle is a joke now.”
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@berrymakenna Is it just me, or did @Chipotle quadruple their prices overnight. What are you putting in this shizzz to make it worth $20. #chipotle #overpriced #quickstory ♬ original sound - Makenna Silbernagel • Fit
Consumers have made similar critiques on other platforms. In January, a TikToker made a video complaining about Chipotle increasing prices “overnight" after paying nearly $20 for a burrito bowl.
“That is so much for one bowl. What is happening!” she says.
Prior to the company’s upcoming increase, Chipotle announced a $1 bump to all of its entrees in July 2022. That was on top of another increase that year, which raised the price of its menu by 4% across the board.
|Q3 2022||$1 more for entrees|
|Q1 2022||4% across the board|
|Q2 2021||4% across the board|
Chipotle Isn’t Alone
Prices have been on the rise at other fast-food chains, too. The cost of limited-service meals and snacks (food from counter-service establishments) is up 6.7% over the past 12 months, according to the Bureau of Labor Statistics. That’s far higher than inflation for food across all categories, which stood at 4.3%, and the overall inflation rate of 3.7%. (The BLS will release figures for September on Thursday.)
Executives have cited higher labor and food costs for the increases, while Chipotle attributed its upcoming increase to "inflation."
Chipotle isn’t exactly struggling, however.
According to Chipotle’s second-quarter earnings report from this year, the company’s operating margin is up by 1.9% year-over-year, meaning that the chain is even more profitable than it was a year ago. Sales and revenue were also higher, with the company making $2.5 billion in the second quarter.
The Bottom Line
Chipotle’s impressive earnings report also tells another story, namely that consumers are continuing to frequent the chain despite inflation. If that continues — and it seems like Chipotle thinks it will — then the fast casual chain has little reason to pause price increases.