Chipotle Mexican Grill, Inc. (NYSE:CMG) may be struggling to reignite restaurant traffic growth, but that’s not stopping the burrito chain from raising prices.
As CNBC reports, the company has now rolled out menu price hikes to all of its remaining stores:
The burrito chain bumped up prices by 5 to 7 percent this week in markets that did not already see increases in 2017, company spokesman Chris Arnold confirmed Wednesday.
Arnold said this is the last phase of Chipotle’s planned price increase and is a response to rising inflation in food and labor costs.
Baird analyst David Tarantino said this latest round of price increases covers the remaining 45 percent of Chipotle locations that were not affected by price hikes in April and November of last year.
Chipotle essentially tested consumers’ willingness to accept higher prices last year in the initial rollout phase. After computing that the higher prices didn’t seem to affect store traffic too much, it went ahead with the price hikes across its entire store base.
Designed to pad restaurant margins amid rising labor costs, it marks the first time Chipotle has raised prices since the middle of 2014.
Chipotle Mexican Grill, Inc. shares rose $5.47 (+1.62%) in premarket trading Friday. Year-to-date, CMG has gained 16.78%, versus a 4.60% rise in the benchmark S&P 500 index during the same period.