(Jakub Porzycki/Getty Images)

Chipotle’s burritos, and its stock, are getting more expensive

The economics of Chipotle are pretty extraordinary for a quick-serve restaurant.

12/6/24 12:24PM

Chipotle and Cava just dropped some news that might make the country’s burrito-and-bowl lovers groan: both are raising prices in early 2025, with Chipotle announcing a 2% nationwide hike and Cava hinting at less than 3%, according to comments from its CFO on Wednesday at a Morgan Stanley conference.

The move isn’t particularly surprising, as quick-service restaurants scramble to keep up with inflation. Indeed, Chipotle has blamed the rising costs of avocado, beef, and dairy for weaker margins during recent earnings calls. That is perhaps why investors were thrilled about the extra cents added to Americans’ favorite bowls: shares of Chipotle jumped 7% in just two days following the announcement, while Cava’s rose 6%, suggesting that investors expect those price hikes to flow through to the bottom line.

Put simply, it seems unlikely that customers will turn their backs on Chipotle even with higher prices. So far, traffic at both chains has grown despite previous hikes. Take Cava: after a ~3% price increase earlier this year, traffic dipped a modest 1.2% in Q1 before rebounding to grow 9.5% in Q2 and 12.9% in Q3. Chipotle last lifted prices by 3% in October 2023, and traffic still rose 7.4% that quarter. Customers might make a fuss about how expensive their damn burrito is, but, when lunchtime rolls around, millions will still flock to the Mexican-inspired chain, which has grown relentlessly over the last 25 years.

Burrito-nomics

Both Cava and Chipotle are profitable — but given Chipotle’s maturity as a business, its ability to spread its corporate costs across its 3,600-plus locations (roughly 10x as many as Cava) helps it make some pretty exceptional profit margins for the food industry.

Many successful restaurants make a margin in the single-digit percentages... if they make any profit at all. Chipotle is on another level, reporting a 17.7% margin for the first nine months of this year, with operating profit of $1.5 billion on sales just shy of $8.5 billion.

Indeed, per its latest earnings, Chipotle’s food, beverage, and packaging costs only accounted for $2.5 billion out of its $8.5 billion in sales — around 30%.

We’re now living in the era of bowlification, where diners are trading up from $5 value meals to $13-$14 customizable creations piled high with premium ingredients. Chipotle’s limited-time-only smoked brisket and Cava’s grilled steak have driven demand and traffic in the latest quarter, despite its higher input costs — up to 30% more than other ingredients. For investors, that’s a bowl worth betting on.

Max Knoblauch10/16/25

Uber launches “digital tasks” in the US, paying some drivers to train AI

Beginning later this fall, US Uber drivers will be able to earn money by completing short “digital tasks” like uploading restaurant menus or recording audio samples.

CEO Dara Khosrowshahi teased the new gig income stream back in June at the Bloomberg Tech conference.

At that time, Khosrowshahi said drivers and couriers were “labeling maps, translating language, looking at AI answers, and grading AI answers.” According to Thursday’s announcement, the tasks won’t be so focused on Uber’s business, but instead on connecting workers with “companies that need real people to help improve their technology.”

Per Uber, digital tasks can be done when drivers aren’t on a trip, be it at home or when not driving, and will take only “a few minutes” each.

Uber’s having drivers train its AI while partnering with robotaxi companies that could replace them

Per Uber, digital tasks can be done when drivers aren’t on a trip, be it at home or when not driving, and will take only “a few minutes” each.

Max Knoblauch

10/15/25

United Airlines posts stronger-than-expected profit but weaker sales in its third quarter

United’s full-year profit outlook falls somewhere in between the dual forecasts it issued back in April.

United Airlines Airplanes at Newark Liberty International Airport in Newark, New Jersey

Hyunsoo Rim, David Crowther

HEAD OF MACROS

10/15/25

Pop-Tarts, Doritos, and Uncrustables have joined the protein craze taking over America’s snack aisle

Food giants are catching up with the latest diet obsession.

Apple TV dropped the “plus” as streamers keep pulling back on originals

After the spray-and-pray approach led to a wave of cancellations, Hollywood is settling into an era of just making fewer shows.

Hyunsoo Rim10/15/25

Max Knoblauch10/14/25

The average price of a new vehicle in the US passed $50,000 for the first time ever in September

The average price of a new vehicle in the US surpassed $50,000 in September, according to Cox Automotive’s Kelley Blue Book.

At $50,080, that’s the highest industry average ever, reflecting the price hikes faced by new car buyers in recent years amid pandemic supply shortages, tariff-induced increases, and the high cost of EV production. The figure marks a 3.6% jump from the same month last year.

“Tariffs have introduced new cost pressure to the business, but the pricing story in September was mostly driven by the healthy mix of EVs and higher-end vehicles pushing the new-vehicle ATP into uncharted territory,” Cox executive analyst Erin Keating said. Passing the $50,000 mark was inevitable, Keating said, especially considering that the country’s bestseller is a Ford truck that “routinely costs north of $65,000.”

Year over year, new vehicle prices rose nearly 6% for GM, while Ford’s climbed 2.5%. Volkswagen new prices were up 12.5%.

As prices climb, so do delinquencies on loans to borrowers with lower credit scores. Recent data from Fitch Ratings shows the portion of subprime US auto loans 60 days or more overdue reached 6.43% in August.