Chipotle Mexican Grill gets sales boost from menu price hike
Chipotle Mexican Grill reported strong sales growth in its fourth quarter thanks to higher menu prices.
Revenue at the fast, casual burrito chain grew 7.3% to US$1.1bn in its fourth quarter.
Same-store sales for the company rose 0.9% in the quarter, beating earnings expectations from Wall Street.
The Denver-based company said that higher menu prices helped to boost sales.
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Chipotle launched the final wave of these price hikes at the start of the year, nudging prices by 5- 7% in regions that didn’t see sales increases last year.
As well as this, Chipotle said that the US tax law changes helped the company save between $40-$50mn.
Jack Hartung, the burrito chain’s CFO, noted that a third of this saving would go directly to Chipotle’s employees.
In fact, Chipotle said that its hourly crew members will be eligible to earn a US$250 bonus whilst its general managers will be able to earn US$1,000.
“During 2017, we have made considerable changes around leadership, operations, and long-term planning and it is clear that, while there is still work to be done, we are starting to see some success,” said Chipotle's founder and CEO Steve Ells in a statement.
In November Ells announced that he was stepping down as CEO and would help the company search for a new replacement who has “demonstrated turnaround expertise to help address the challenges facing the company, improve execution, build customer trust, and drive sales.”