Chipotle would raise menu prices if federal minimum wage goes up to $15
Menu pricing would increase between 2% to 3%, Chipotle CFO says
Guac won’t be the only thing Chipotle fans could be spending more per meal on if the federal minimum wage goes up to $15 an hour, the chain’s chief financial officer said.
Raising its minimum wage from $12 for its crew and $13 for hourly employees to the proposed $15 could result in menu pricing that would increase between 2% to 3%, Chipotle CFO Jack Hartung said on an earnings call earlier this week.
So eaters looking to buy an item like its Chicken Burrito, priced around $8.95, could see an $0.18 to $0.27 increase, not including the tax increase.
Chipotle menu items could go up 2% to 3% if the federal minimum wage raises to $15 per hour. (Getty Images)
"Let’s say for example, that there's going to be an across the board, 10% increase in our wages, that would have an impact on our margins, I will call it 150 to 200 basis points," Hartung said on the earnings call.
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"So all of that is very, very manageable. And we feel like if there is going to be significant increased inflation there because of market-driven or because of federal minimum wage, we think everybody in the restaurant industry is going to have to pass those costs along to the customer. And we think we're in a much, much better position to do that than other companies out there," Hartung continued.
Chipotle’s digital sales made up 133.9% growth in the first quarter compared with the same time period last year thanks to increased digital ordering with more consumers ordering take out during the pandemic. As a result, the chain opened 40 new restaurants with 26 including its Chipotlane for easy pickup.
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President Joe Biden and democrats have expressed support for a federal minimum wage raise to $15 an hour from the current $7.25 an hour to help lower-paid workers get out of poverty.