This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Chipotle's Price Hike: Will Customers Care?

NEW YORK (TheStreet) - Chipotle (CMG - Get Report) is raising prices, but is it a big deal for customers?

Suffering from higher food costs, especially in beef, cheese and avocados, the popular Denver-based chain noted on its first-quarter earnings call that menu prices would rise on average in the mid-single-digits. Management said it expected to start installing new menu boards with the upped pricing late in the second-quarter, and be fully rolled out by early in the third quarter. Chipotle noted that the last time it raised menu prices was nearly three years ago. TheStreet's Laurie Kulikowski has details on what to expect when Chipotle reports results:

WATCH: More market update videos on TheStreet TV

In an email to TheStreet, Chipotle spokesman Chris Arnold wrote that the company will provide an "update on the status the price increase" during its earnings call. According to a Wells Fargo Securities research note, approximately 60% of Chipotle's 1,637 stores have implemented the new pricing plan as of June 11.

Chipotle Gets 'Wake Up Call' on Executive Compensation

How PizzaRev Plans To Be the 'Chipotle of Pizza'

Why Chipotle Is Raising Menu Prices

5 Companies Against Genetically Modified Foods

Chipotle, of course, isn't the only restaurant chain feeling the pinch of higher costs. Starbucks (SBUX) and Sonic (SONC) are two more examples of restaurants raising prices.

A recent survey by SpenDifference found that more than half of chains held steady on price increases during the first quarter, however, 93% of chains plan to raise prices during the second half of this year. "Recent events affecting commodities may provide operators the impetus to follow through on their planned increases," SpenDifference CEO Maryanne Rose said in a June release.

SpenDifference works with emerging to mid-sized restaurant companies to provide full-service supply chain support. The company currently works with approximately 20 national and regional chains that represent nearly $1 billion annually in purchasing.

Prices for beef and cheese are at an all-time high, SpenDifference noted. The Porcine Epidemic Diarrhea Virus that broke out in Iowa last year has spread to 23 states, severely impacted pork costs, according to SpenDifference.

"The price increases are happening everywhere -- even In-N-Out Burger," restaurant consultant Tom Kelley wrote in an email. "Now with new city and state minimum wage increases there's no end in sight."

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
CMG $652.50 -0.44%
AAPL $125.27 -0.87%
FB $82.81 -0.46%
GOOG $552.57 0.10%
TSLA $190.70 0.07%


DOW 17,868.28 -108.03 -0.60%
S&P 500 2,077.60 -8.64 -0.41%
NASDAQ 4,924.7410 -22.70 -0.46%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs