Chipotle CFO doesn’t rule out more food inflation despite pause

Finance chief Jack Hartung said the restaurant chain has raised prices by a total of about 10% for the 12 months through the first quarter compared to 2% in a typical year.


Maura Webber Sadovi, CFODive  

May 10, 2022


Chipotle Mexican Grill CFO Jack Hartung is a self-described optimist who views a recent pause in the rise of ingredient costs as a “shallow victory” against soaring inflation. He’ll take it anyway.


“I never thought I’d be celebrating or be relieved because we had a month and a half — we’re talking six weeks —where we didn’t see a price increase because normally the visibility in pricing and supply when you have a company of our size is much, much longer,” he said in an interview last week. “That’s the kind of cycle that we’re in.”


Not all ingredients are holding steady even as overall there was no “stair-step” move up on the “basket” of ingredients that the company buys to make its burritos and other menu items. In the first quarter the company reported food, beverage and packaging costs were 31% of total revenue, an increase of 100 basis points compared to the year-earlier period, with inflation impacting beef, and avocados, according to a company release.


Hartung isn’t certain that the current leveling off signals a full reprieve. “I’d love it to be that inflation continues to pause and that our ingredient costs are stable here on out and I’d love to be able to say six months from now that we’ve not increased our prices,” Hartung said. “But we’ll see. It all just depends on the inflationary environment.” Similarly, he told analysts last month he would “not build a reduction in food costs” in if he were going to build a model this year.


Over the past 12 months through the first quarter the company has increased prices three times for a total cumulative rise of about 10% compared to the more typical annual price hike in the 2% range, he said. The price increase partially offset cumulative inflation the company faced over the same period of 13%-14% stemming from a combination of higher ingredient and energy prices along with rising wages, he said...


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