Image source: Chipotle Mexican Grill
Chipotle Mexican Grill Inc (NYSE: CMG) has hiked its menu prices by roughly 4% to offset a recent bump in employee wages.
Brian Niccol, the fast-casual burrito chain’s chief executive officer, said Tuesday that while the company preferred not to raise its prices, “it made sense in this scenario to invest in our employees and get these restaurants staffed and make sure we had the pipeline of people to support our growth.”
Chief financial officer Jack Hartung called it “the right thing at the right time.”
Speaking at the Baird Global Consumer, Technology & Services virtual conference, Hartung said, “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.”
In May, Chipotle said it would be raising the average hourly wage from $13 to $15 per hour by the end of June for new and existing hourly and salaried employees.
The company also said it was looking to hire 20,000 new employees at its 200 locations nationwide ahead of what it anticipates being a busy summer season as pandemic-era restrictions ease.
Amid a nationwide labor shortage within the restaurant and hospitality industry, several companies, including Target Corporation, McDonald’s Corporation, Starbucks Corporation and Costco Wholesale Corporation, rolled out wage increases, bonuses and other enhanced benefits in a bid to attract new workers and retain current ones.
In its hiring announcement, Chipotle said it would offer a $200 employee referral bonus and that employees could potentially be promoted to a general manager position — which has an average salary of $100,000 annually — within three-and-a-half years.
Chipotle executives said they are not planning further price increases despite rising ingredient costs across the restaurant industry as the supply chain deals with a return in demand, according to CNBC.
Source: Equities News