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Chipotle Says Value Keeps Customers Coming Back Despite Rising Prices

Higher prices at Chipotle haven’t kept customers from visiting and spending at the fast-casual restaurant.

They’re doing so because of value, executives said during the company’s quarterly earnings call.

Chipotle saw its comparable restaurant sales increase 7% year over year during the first quarter, the company said in a Wednesday (April 24) earnings release.

The company attributed that increase to higher transactions of 5.4% and a 1.6% increase in average check.

Chipotle has also seen an increase in “side attachment,” when customers add extra meats or chips to their order, Jack Hartung, chief financial officer at Chipotle, said during the call.

The company has made these gains despite increasing menu prices in October 2023. During the first quarter, pricing was up 2.8% year over year, Hartung said.

Asked by an analyst about the consumers who are driving the traffic at the restaurants, in terms of low-income versus high-income, Brian Niccol, chairman and CEO of Chipotle, said during the call that “It’s really broad based.”

“From the low-income consumer to the middle-income to the high-income consumer, we’re just seeing gains with all income cohorts,” Niccol said. “And when we ask the question — ‘Why is that?’ — what we hear back from every group is, ‘It’s a great value proposition.’

“So the speed at which people can get these quality ingredients, customize the ways they want for the price points that we provide is just paying back — it just creates value in this environment,” Niccol added.

Chipotle’s California stores increased menu prices another 5% to 6% in April to cover the cost of the state’s minimum wage increase, which lifted Chipotle’s wages by about 20%, Hartung said during the call. So far, the company has not seen any change in customer behavior, but it’s too early to tell.

“After the increase, we still have burritos that are going to be reasonably priced,” Hartung said. “The chicken burrito is going to be around $10.” 

Chipotle’s rewards program recently marked its fifth anniversary and now has about 40 million members. As customer engagement with the program increases, so does spend and frequency, Niccol said during the call.

“Through our marketing initiatives, we continue to find successful ways to drive enrollments, and we are leveraging our digital team to create a seamless app experience and deliver more relevant journeys for our rewards members,” Niccol said.

The company opened 47 new restaurants in the first quarter and plans to open a total of between 285 and 315 in the full year of 2024, Hartung said.

Looking ahead, Chipotle expects full year comparable restaurant sales growth in the mid- to high-single digits.