Chipotle's CFO: No Price Hikes in Sight Amid Tariff Uncertainty

Chipotle Mexican Grill's (CMG) CFO, Adam Rymer, has reassured investors that the fast-casual chain has no plans to raise prices in the near future, despite the potential impact of tariffs on food costs. In a recent earnings call, Rymer stated that Chipotle is closely monitoring the situation and will not implement price hikes until the effects of tariffs on key ingredients, such as avocados and chicken, become clearer.

Chipotle's cautious approach to pricing is not surprising, given the company's history of maintaining pricing power even as diners become more value-conscious. In the fourth quarter of 2024, Chipotle reported same-store sales growth of 5.4%, fueled by a traffic increase of 4%. This strong performance demonstrates that Chipotle can raise prices without significantly impacting traffic growth, a testament to its pricing power.

However, the potential impact of tariffs on food costs is a concern for Chipotle and other fast-casual restaurants. If tariffs on imports from Mexico, Canada, and China go into effect, Chipotle expects its cost of sales to rise by about 60 basis points, or 0.6 percentage points. To mitigate this impact, Chipotle has taken steps to diversify its sourcing, buying about half of its avocado supply from Colombia, Peru, and the Dominican Republic, reducing its reliance on Mexican avocados.



Chipotle's approach to tariffs and pricing sets it apart from its competitors in the fast-casual restaurant industry. While other chains may be more vulnerable to tariff-related price increases, Chipotle's proactive strategy, combined with its strong brand and customer loyalty, can help it maintain its market position and customer base. By minimizing the impact of tariffs on its operations and pricing strategy, Chipotle can continue to offer competitive pricing and maintain customer satisfaction.

In conclusion, Chipotle's CFO has made it clear that the company has no plans to raise prices in the near future, despite the potential impact of tariffs on food costs. By diversifying its sourcing and maintaining pricing power, Chipotle can minimize the impact of tariffs on its operations and pricing strategy, helping it maintain its market position and customer base. As the situation with tariffs evolves, Chipotle will continue to monitor the situation and make decisions that align with its long-term financial goals.