Wrapped in riches
Your next burrito bowl may set you back more than you expect: the Mexican fast food chain Chipotle announced plans to increase prices again, marking the 4th such increase in the last 2 years.
Details on the price hikes are thin on the ground, but justifications for them are plentiful, with the company blaming soaring ingredient costs and rising wages. Whatever the logic, Chipotle is raising prices because it can, with the brand arguably in its strongest position in the company’s history. Since 2001, Chipotle sales have skyrocketed some 65x, reaching $8.6 billion last year, equivalent to growing revenue ~22% every year for 21 years.
There's a few reasons for Chipotle's rapid growth: quick and tasty food, of course, but also a relatively rare business model in the world of fast food. Unlike most of its main rivals, such as McDonald’s, Taco Bell or Subway, Chipotle doesn’t franchise its restaurants. With every site owned and run by the company, Chipotle HQ can, in theory, keep a close eye on the day-to-day running of every outlet — although it failed to prevent an outbreak of E. Coli and food poisoning that was linked to some of its restaurants, which sent sales plummeting in 2015/16.
Auto-assemble
The price hikes come just a week after Chipotle announced it was testing a robot that can assemble burrito bowls and salads. If successful, it would help the company meet the growing demand for those products, which make up some 65% of Chipotle's digital orders.
