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Chipotle was revealed to have raised its menu prices recently, and this was due to the wage hikes for employees. It was reported that the Mexican grill fast-food chain implemented an increase of around 3.4 to 4 percent on food items.
Increase in cost of the menu- Explained
Chipotle’s chief financial officer, John Hartung, shared on Tuesday, June 8, that the company was forced to raise the prices because they need to cover the cost of staff wages that also increased recently. Moreover, they need to add more workers as the summer approaches, and more customers are expected to come and dine.
"You take about a 4% price increase to cover the dollar cost of the extra labor," CNN Business quoted Hartung as saying to an analyst during a conference. “It feels like the right thing, at the right time, and it feels like the industry is now going to have to either do something similar or play some kind of catch-up, otherwise you’ll just lose the staffing gain.”
It was last month when Chipotle announced that it would be issuing pay hikes for its employees. The restaurant chain said that it would be paying workers an average of $15 per hour. Around the same time, the company also said that it would hire 20,000 additional staff as they prepare for the summer surge.
With the pay hike and thousands of new employees, it is easy to see why Chipotle would want to increase the prices of its menu. It will need more funds to afford the workers’ payments.
Worker’s pay increase is needed
In any case, the pay hike is important these days, that is why Chipotle has no choice but to issue a wage increase. As it is getting harder to find new workers, it has to raise the pay for people to apply. Even McDonald’s and the others are using this tactic as there is a staff shortage across the United States up to now.
CNBC reported that the consumer demand is going up as people are starting to dine in again with the easing of restrictions related to the COVID-19 pandemic. As this happens, more workers are needed to accommodate all the orders and provide good service to customers.
Thus, restaurants have started to open job recruitment events, but the problem is that applicants are few. One of the solutions is to offer more perks, benefits, and higher pay, so Chipotle is also doing this strategy to fill in its vacancies and eventually boost the business.
