Chipotle Pumps Brakes On Price Hikes After Finding That Sales Lacked 'Pop'

Chipotle Pumps Brakes On Price Hikes After Finding That Sales Lacked ‘Pop’

Chipotle lost investor confidence as much as 5% throughout trading on Feb. 8, the day after the Mexican burrito, bowl and taco empire quickly and casually announced its fourth quarter financial results. 2022 – during which sales volume was declining. “We started the quarter on a smooth note, and we ended the quarter on a smooth note,” Chipotle chief financial officer Jack Hartung conceded during an earnings call (via CNBC). Specifically, and among other disappointing numbers Hartung was referring to, same-store sales fell 5.6%, sharply from 7.6% in the third quarter, but also well below the company’s estimate. 6.9% from Wall Street in the fourth quarter.

Company CEO Brian Niccol denies that Chipotle’s fourth-quarter failure to “burst,” as Hartung described it, stemmed from customer resistance to menu price hikes; fellow C-suiters instead blamed bad weather and a limited-edition menu item that failed to meet expectations. And a financial analyst blamed the share price decline on “additional scrutiny” given the company in 2023 thanks to overall share price gains of 22%, Yahoo! Finance reported Wednesday. Additionally, Yahoo Finance notes that, at least unofficially, Chipotle’s same-store sales are doing very well, thank you very much, in 2023.

However, it’s hard not to speculate whether Chipotle’s third-quarter sales decline resulted from lower- and middle-income consumers’ unwillingness to pay more for the same food. Even like Chipotle talks extraordinary growth plans for 2023Hartung’s word is that Chipotle has placed a moratorium on menu price increases in 2023.

Leave a Comment

Your email address will not be published. Required fields are marked *