Chipotle is a well-loved fast-food chain that typically uses higher-quality ingredients. However, Chipotle also has the reputation of being more expensive than its competitors.
So, why is Chipotle so expensive, and will their menu prices keep rising? Here’s what you need to know in 2022.
Table of Contents
- Why Does Chipotle Cost So Much?
- Higher Employee Wages
- Higher Food Costs
- Delivery and Digital Fees
- All Fast Food Chains Have Increased in Price
- What Can You Do?
- What Makes Chipotle So Expensive?
Why Does Chipotle Cost So Much?
There are multiple reasons why Chipotle is more expensive and why prices keep rising. Some reasons could include inflation, rising employee wages, expensive deliveries, and more. Unfortunately, as of February 2022, Chipotle says its prices are likely to continue rising.
When Did Chipotle’s Prices Increase?
Chipotle’s menu prices have steadily increased, especially in the past few years. Compared to 2020, Chipotle’s prices are up by at least 10%. Not to mention, the menu prices were increased by 4% in December of 2021 to offset the costs of higher wages and certain menu items.
These price increases mean you could be paying an extra 10% per menu item. This means if a burrito in 2020 costs $9, it will cost you about $9.90 today.
Higher Employee Wages
One of the reasons for Chipotle’s price hikes is an increase in employee wages. Labor costs are on the rise because employees are seeking higher wages. In May 2021, Chipotle unveiled plans to increase employee wages to an average of $15 an hour to meet these demands.
In fact, the company’s labor costs rose to around 26% after they raised their average U.S wage. Chipotle might hope to offset these increased wages with more expensive menu items.
Higher Food Costs
The cost of food and services in the United States has steadily been on the rise since 2020. In fact, in December 2021, the inflation rate was at an all-time high and had the highest increase in 40 years. The inflation rate has been up 7% since December 2021 and has increased from the previous year-over increase of 6.8%.
Avocado Prices Are on the Rise
One of the specific food costs is avocados. Avocado prices are steadily increasing and are expected to get worse. The monthly average price of consumer avocados has risen about 40% since January 2021, costing roughly $1.36 per avocado compared to $1.05. You might need to ask yourself, “Is it still worth it to pay extra for guac?”
On top of that, California—where over 90% of U.S. avocados come from—has been suffering from severe droughts, causing a decrease in avocado production. There’s also fear concerning Florida’s and the Dominican Republic’s avocado supply.
In fact, some business owners are experiencing the blunt end of inflation issues. Some business owners saw the cost of a case of avocados increase from $20 all the way to $80 in under three weeks. Some individuals are expecting the cost to rise well over $100 per case.
Beef, Pork, and Poultry Price Increase
Meat and seafood prices are also skyrocketing. Beef, pork, and poultry are staple ingredients at Chipotle, resulting in higher food costs. Here are the inflation rates for these ingredients:
- Beef: 9.3% increase
- Pork: 8.6% increase
- Poultry: 5.1% increase
Delivery and Digital Fees
Another reason why Chipotle has become so expensive is delivery and digital fees. You might have also noticed that Chipotle has become more expensive on third-party apps such as DoorDash. Digital orders make up around 42% of Chipotle’s business, while delivery orders are a little under 20%. Because of this, Chipotle increased its menu prices on third-party delivery apps to improve these margins.
It’s safe to say that the price of convenience doesn’t come cheap.
All Fast Food Chains Have Increased in Price
Chipotle isn’t the only fast-food chain that increased its prices. In December 2021, fast-food menu prices rose by 8%. When it comes to full-service restaurants, there was a 6.6% increase in cost. This increase has been the largest in the industry since 1982. However, the increase for consumer food-at-home in 1982 was 6.5%.
The fast-food industry might be raising its prices dramatically to offset the costs of operating. These restaurants are paying significantly more for ingredients and labor, which are two of the highest expenses in the industry.
For example, some food chains are expecting food costs to increase by 8% to 10%. This rate might be three to even four times the normal rate of inflation. Other restaurants are losing sales due to a lack of workers. Some of these chains believe labor issues will be a long-term problem.
Oddly enough, consumers aren’t changing their habits. Restaurant sales have gone up from where they were before COVID-19. This creates little to no incentive to lower or stop raising prices.
What Can You Do?
Although many customers aren’t phased by Chipotle’s menu price increases, you might be wondering what you can do to offset the costs of eating out. Besides foregoing takeout altogether, you can follow these tips to increase your chances of cheaper expenses.
Don’t Use Delivery
Avoiding third-party delivery apps is one way you can save on takeout meals. Delivery apps like DoorDash, UberEats and Postmates can significantly impact the cost of ordering out. These apps can easily have menu items that are over 10% more expensive. You’ll end up spending much more than you might have intended when you combine that with taxes, service fees, and delivery tips.
Join Chipotle Rewards
Another way you can save money at Chipotle is by joining its Rewards Program. Chipotle Rewards is free to join and can be accessed through the App Store or Google Play. New members receive a digital coupon for free chips and guac after they spend $5.
Members also receive 10 points for every $1 spent amongst other digital coupons. Members can redeem a free meal after earning 1,250 points or spending $125. However, you must redeem your points by any coupon’s expiration date.
Although $125 is a lot to spend for a free meal, the Chipotle Rewards Program can help offset prices if you frequent the business.
What Makes Chipotle So Expensive?
There are multiple reasons why Chipotle is more expensive than other fast-food restaurants. Generally speaking, Chipotle uses higher quality ingredients that range from organic to non-GMO. However, Chipotle might be so expensive due to inflation, rising employee wages, more expensive delivery fees, higher food costs, and more.