Chipotle raises menu prices to offset employee wages
Source: CNN Business via the Roanoke Times
Chipotle raises menu prices to offset employee wages
By Danielle Wiener-Bronner, CNN Business 2 hrs ago
Chipotle raised its menu prices by about 3.5% to 4% to cover the cost of higher wages for employees, company Chief Financial Officer John Hartung said Tuesday.
"You take about a 4% price increase to cover the dollar cost of the extra labor," he told an analyst during a conference.
Chipotle announced in May that it would increase restaurant worker pay to an average of $15 per hour. The company said at the time that it was looking to hire 20,000 new employees ahead of the summer.
As restaurants prepare for a bustling summer, many are finding it difficult to staff up. And Chipotle's not the only chain trying to attract labor with higher wages. McDonald's said last month that it would hike pay for workers at its company-owned stores.
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Read more: https://roanoke.com/lifestyles/food-and-cooking/chipotle-raises-menu-prices-to-offset-employee-wages/article_0326de72-1699-5fde-82b1-7ec3c0aa2d23.html
Warning: loud autoplay video
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Restaurant chain Chipotle raised its menu prices by about 3.5% to 4% to cover the cost of higher wages for employees, the company has announced.
Link to tweet
SheltieLover
(57,073 posts)FBaggins
(26,757 posts)You think they have any profits left?
Truthfully
this could be good. The claim is that wages cant rise because people wont pay more for a burger (burrito
whatever). If they raise wages and then raise prices to support those wages
and their sales dont suffer?
sheshe2
(83,858 posts)Do they think many Americans can even afford to eat out?
brooklynite
(94,700 posts)And, no, Im not talking about fancy restaurants for the 1%ers.
sheshe2
(83,858 posts)Something about a 300 per course 'tasting' meal.
Bon Appétit!
I doubt it is the struggling class that are filling said restaurants.
An aside. I will not be going to any full capacity restaurant anytime soon. COVID is not done with us.
brooklynite
(94,700 posts)I do walk around my (and other) neighborhoods. The Yemeni place is always busy. So is the Indian place. So is the pizza place.
89% of NYC's employed labor force are working. They're also tired of being stuck at home and are happy to eat out. If you're suggesting that they're all 1%ers, then NYC must be doing very well.
sheshe2
(83,858 posts)Please read it again.
brooklynite
(94,700 posts)sheshe2
(83,858 posts)brooklynite
(94,700 posts)sheshe2
(83,858 posts)LanternWaste
(37,748 posts)"If people don't assert unsupported statements, I'll have nothing to say..."
Like the unsupported assertion Trump would never be impeached twice?
Or do we rationalize a distinction lacking a relevant difference to better validate holding others to a higher standard as we ourselves prophesize the absurd?
I'm guessing the latter... as I also guess a rationalization will be made soon.
pnwmom
(108,990 posts)they can go less often or skip dessert.
rdking647
(5,113 posts)revenue up 7%
net earnings of 352m
Lancero
(3,011 posts)NickB79
(19,258 posts)With sit-down restaurants closed.
SheltieLover
(57,073 posts)Working families already shoulder the expense for every CEO's ridiculous salary & every corpprate upgrade.
brooklynite
(94,700 posts)Nobody is forced to eat at a restaurant.
pnwmom
(108,990 posts)can be paid more.
paleotn
(17,945 posts)They did just fine.
ForgoTheConsequence
(4,869 posts)A quick google search would have shown you that.
mitch96
(13,924 posts)It's all about the profits and not the people..uff
m
everyonematters
(3,434 posts)As prices go up, demand goes down. They make a little less profit; the employees make a little more. There is a price at which you maximize your profits, if you raise it any more, you just make less profit.
Sapient Donkey
(1,568 posts)It looks like they have 60k+ employees in total. How many of those are the workers who would be affected by that? At least half, right? Probably more, but let's say 30k. Let's give a $5 increase (from $10 to $15), for someone working 35 hours a week that is about $7,300/yr increase per employee with a 52 week year. 7300 * 30000 is $220,500,000 increase in wage costs. I'm mostly pulling these numbers out of my ass, but I think it does give an idea of how much the wage increase will cost when dealing with it on that scale. We're not talking a couple million bucks, but more like $200 million to 300 million, I think.
They might be raising costs higher than they need to, but I don't have a problem in principle with some slight price increases to ensure some people get a fairer wage. If I have to pay $12.50 (4% of $12 is $0.48) instead of $12 for my taco bowel so that someone can get a wage that makes their life easier, then I'm not to worried about that. Even if I'm a huge Chipotle fan who spends $1k/yr there, that's a $40/yr increase for me so that some person who is probably struggling gets an extra $7-9k/yr
At least that is my view of this right now. I'm open to hear other thoughts.
everyonematters
(3,434 posts)olegramps
(8,200 posts)How can you enjoy eating when the person waiting on you is being paid starvation wages? Just skip one visit to the resturants and you will cover the increased cost by 96% of the time you can enjoy having people serve cook and serve you.
ruet
(10,039 posts)Who do consumers get to pass their costs down to?
Capitalism is a dead end.
brooklynite
(94,700 posts)Name an economic system thats better.
Tiger8
(432 posts)Any problems of Capitalism are solved at the ballot box.
If I invent something that I sell a billion at $10 profit per unit, it's because people see a value in it. I'm happy to pay taxes on my $10 billion. But if my tax rate is so high that I don't produce the item, then everybody loses.
GulfCoast66
(11,949 posts)All of Western Europe is capitalist. South Korea, Japan, Australia, New Zealand are capitalist.
Needless to say Canada.
But many practice social democracy where everyone gets the benefits of capitalism, not just those with capital. We dont.
pbmus
(12,422 posts)Capitalism is good for owners of capital, workers who work for capitalists not so good
And its only gotten worse over the last 40 years
.because every politician from raygun to the Big Con has propped up big money
.
We wonder why 74 million voted for a Con, and several hundred stormed our capital
The major reason fascism takes hold is because of an unfair economic system
.
GulfCoast66
(11,949 posts)Still waiting to hear a better alternative.
enki23
(7,789 posts)Sounds like we need "labor shortages" more often. Maybe artificial ones, as needed.
(go figure)
Bucky
(54,041 posts)It's a basic thing I cover in all my classes. Recoveries are by nature inflationary. But the cost increases aren't all on labor. Capital costs (equipment, transportation, facilities, and servicing bank loans for expanding operations) and the cost of rising food prices are also calculated into that 4% price hike.
For the last 5 to 6 years, retail employers have been feeling like they're fat cats by offering eight or nine dollars an hour for line workers. But the cost of living has gone up a lot more than 16% median wage increase since the last hike in minimum wage.
You have to legislatively boost that minimum wage over the next 6 years. Housing costs alone are killing the working class
h2ebits
(645 posts)Keep sharing the economics information so that more and more people can learn. Armchair experts abound and need accurate data.
Humanist_Activist
(7,670 posts)8 dollars an hour, when I finally left for a higher paying job in 2019, their starting wage was....8 dollars an hour. That's fucking insane, and it wasn't a livable wage, not even close, in 2009. Hell, they were pushing me out by 2019, because my raises made me cost more to them than my newer coworkers, by that time, I was one of about 3 people left who weren't salaried supervisors from around that same time period.
Sapient Donkey
(1,568 posts)How exactly does a very similar job I did back in 2010 pay roughly the same now in 2021? Even worse, often times requiring even more in their laundry list of skills. There might be a dollar or so increase, but not nearly enough to keep up with the rising housing and other living costs. I often times become annoyed enough that I will respond to job postings in which I detail why they are assholes. To get through their automated filters, I will add keywords that perfectly match what they want. I've only had two responses. One was from a guy who said he's just a small businesses who barely makes it. I didn't really buy what he was trying to sale. The other thanked me for my input and they actually raised the salary on the posting. Not sure if I actually made them make actual changes, or if they were just correcting an error in their posting. I'm sure for the most they just ignore my rants, but it sure makes me feel better when I do it.
MichMan
(11,960 posts)enki23
(7,789 posts)I just looked up some values. Nationally, the average wage at Chipotle is (according to payscale.com) $11.82 per hour. That would make this approximately a 25% wage increase overall. Hopefully not acquired by biasing it toward managers obviously. But most of them aren't exactly rolling in money either.
dixiechiken1
(2,113 posts)But the increased costs of meat, fuel, produce, etc. have nothing to do with it?
I call BULLSHIT.
leftieNanner
(15,143 posts)So yeah. Let's blame the employees.
oldsoftie
(12,586 posts)Big salaries dont equate to much for 10s of thousands of people.
He's not blaming the employees, he's blaming costs. Thats business.
Sapient Donkey
(1,568 posts)I saw he has a base salary of like $1.2 million, and the rest were stock awards. How does that work in practice? Does that mean he received 30 millions dollars worth of stock for the year, or that his stocks in the company are now valued at that? Could he get another 30 million in stocks next year, making it 60 million over the past two years, or is it that that 30 million he has might gain another 20 million in value making it 50 million? Maybe someone here can clear that up, because I was talking to someone about this last night and neither of us had much of a clue.
https://www.marketwatch.com/story/chipotle-ceos-2020-pay-more-than-doubles-as-covid-related-psu-modifications-provided-a-23-million-boost-2021-04-05
durablend
(7,464 posts)$15/hour pay meant teh Big Macs go from $5 to $20.
THEY LIED?!?!?
paleotn
(17,945 posts)CEO's don't lie....do they?
louis-t
(23,297 posts)Shouldn't have any problem getting employees now.
JI7
(89,262 posts)Fast food and casual food places often can come out to 10 to 15 dollars just getting one meal with a drink .
JohnnyRingo
(18,640 posts)...to a $7.00 burrito.
Sounds fair to me. They've had larger increases to give the CEO a Christmas bonus.
Jilly_in_VA
(9,994 posts)I prefer Qdoba though. I ate at Chipotle the other day and it was darn near tasteless.
aeromanKC
(3,326 posts)I haven't ordered from Papa John's since. They would have remained on speed dial if they would have welcomed the $0.25 per Pizza increase in order to provide employees with Healthcare thanks to ACA.
leftieNanner
(15,143 posts)has a 27 car garage and a 48,000 square foot "house".
I call BS.
I don't order their pizza either. Never have. Never will. We have too many good local joints!
rpannier
(24,333 posts)leftieNanner
(15,143 posts)Some alligators?
rpannier
(24,333 posts)A siege tower and canon
wryter2000
(46,077 posts)If you want to buy a bad pizza, are you going to change your mind because it costs an extra quarter?
COL Mustard
(5,917 posts)I ordered from them just today and it was quite tasty. I'm glad they're doing that.
mucifer
(23,559 posts)They have a good vegan options.
leftieNanner
(15,143 posts)Lots of Mexican restaurants use soy sauce in their marinades (seriously!) and when my daughters were diagnosed with celiac a number of years ago, it was one place they could eat that served decent fresh food.
Bleacher Creature
(11,257 posts)That said, top executives and shareholders should also shoulder some of that burden.
badhair77
(4,220 posts)badhair77
(4,220 posts)Everyone is hurting for help. Maybe the high school kids can fill in.
I havent been to Chipotle since an employee was rude to me. I walked next door to Panera and havent looked back.
greenjar_01
(6,477 posts)THAT'S WHAT THE MOTHERFUCKING SERVICE COSTS.
I wonder whether the OP thinks it's a bad idea to raise wages, Mr. Jobs Numbers.
NickB79
(19,258 posts)And got my usual, ($7.50 chicken burrito), I'd spend $780 a year.
A 4% rise in cost turns that into $811 a year.
A whopping $31 in an entire year. Oh the humanity!!!
AZLD4Candidate
(5,747 posts)There aren't enough onions in the world.
WarGamer
(12,463 posts)Economics 101
Like it or not, the purpose of a (most) business is to make a profit.
If something reduces their bottom line (overhead, infrastructure, taxation, payroll) they will simply adjust something to end up with the same bottom line.
Many restaurants are now adding mandatory 3-5% surcharges to all bills to cover higher payroll.
The Consumer ALWAYS gets burnt.
oldsoftie
(12,586 posts)I of the Eye
(41 posts)They keep the sum, we get the other part.
Autumn
(45,120 posts)never went back.
Baked Potato
(7,733 posts)MontanaMama
(23,337 posts)We have never had to raise our prices to cover employee wage increases. Not once. We give a 5% increase to all employees annually in addition to other perks and benefits. Other than a slight uptick in federal payroll taxes, our bottom line isnt affected in any noticeable way.
paleotn
(17,945 posts)Recruiting and training is expensive. Not to mention the knowledge that walks out the door when an employee leaves. Lots of business owners and corporate exec types don't understand that part of the equation and bitch and moan about the cost of their headcount turnover. Been there, seen it in corporate America. It's not a pretty picture. It pays in hugely to keep people well paid and well appreciated.
MontanaMama
(23,337 posts)We have extremely low turnover. Hiring and training is so expensive. After we hire someone and they seem like a good fit, I sit down with them and we talk about compensation and what is ofvalue to them. Every one of our employees has a different compensation package based on their wants and needs. Some of our folks have kids, some of our folks are retired, some need insurance, some have their insurance covered by a spouse
Everyones lives are so different and, as an employer, recognizing that is the key to keeping people happy and feeling cared for.
I have one guy who wants his Costco membership paid, a stipend to pay for his health insurance on his wifes policy and a line of credit at the hardware store...thats what speaks to him. I have another employee that wants to come in work at 4:30am and leave by noon. I have another employee that is going to pharmacy school at the local university and needs very flexible hours. Another guy wants specific paid holidays, flex time and health insurance. All of it is possible and crucial to keeping us up and running. I care about the people who work for us and it is my job to give them what they need.
pbmus
(12,422 posts)In a garbage dump of greed..
Cryptoad
(8,254 posts)they cut the upper management an executives salary and bonuses a wee bit ,,,,,
PSPS
(13,613 posts)GB_RN
(2,373 posts)Saw this info from Dan Price. CEO got a huge pay raise and he said that Chipotle is now getting ready to CUT their hourly worker pay back to $13 an hour, IIRC.
Screw Chipotle
not that I eat there, anyway.
VarryOn
(2,343 posts)I work in freight transportation. I've never seen rates rise this fast in 33 years. We wouldn't accept anywhere near 3-4% rate increases. Even the largest shippers are taking double digit increases.
The good thing is truck drivers are going to get nice increases because of it.
Ferrets are Cool
(21,109 posts)That's a VERY small price to pay for semi-living wages for the staff.
relayerbob
(6,551 posts)where you too can expeience prison quality food in the ambiance of a prison cafeteria.
NurseJackie
(42,862 posts)Orrex
(63,220 posts)If the business couldn't pay its suppliers or its utility bills or its rent, no one would say "oh, that noble business should get to pay less than is due." But when we're talking about exploiting the workers, someone always steps up to cheer the business on.
At this point some clever soul usually asks me "Well Orrex, how much to you pay your employees?"
I don't have any employees, obviously, because I can't afford to pay them a living wage, and because I'm not a fucking asshole who thinks that I'm entitled to exploit people's financial hardship for my own gain.
Chipotle can go fuck itself.
pnwmom
(108,990 posts)can never raise its prices. This is a good reason for doing so.
Orrex
(63,220 posts)Once again, a multi-billion dollar company is shifting the cost of its failures away from those who are at fault, namely the corporate structure that decided starvation wages were great. This has the further intent of "proving" the false claim that raising wages necessarily results in higher prices. That's been the favorite rebuttal of corporations for a century or so, and they roll it out to whine about every single change that might benefit employees.
I'd be curious to see how much Chipotle paid in taxes during the last decade or so, and how much its CEO paid.
Hiawatha Pete
(1,800 posts)Soxderrube
(37 posts)Of wage packages? How much of the $11 + goes for insurance, sick pay, vacation, or pension? I was a union worker the last contract they negotiated it was published as $18 per hour after all the things I mentioned I ended up earning $12.25 per hour as take home and the unknowing thought I should not make that much.
Warpy
(111,329 posts)and I think the average diner will find that won't break the bank.
(Don't bag me about the price, it's a guess because I prefer my own cooking and eat at home)
Grokenstein
(5,727 posts)Seemed like a big load of horseshit at the time; seems even moreso now.
(Below is the "Honest" version from Funny or Die)
Gore1FL
(21,151 posts)Hekate
(90,773 posts)marble falls
(57,157 posts)... meant nothing because at I made over $25/hr at least 90% of the time. And I know 80% of servers made the same $2.13 and hardly went over $10/hr. I absolutely have no problem with my brothers and sisters earning a living wage. Especially, I hear about so many employer scams to steal tips and compensate other employees with them.