Increased Traffic Drives Profit Growth At Chipotles, Despite Rising Costs

Chipotle fast-casual Mexican restaurants have experienced higher traffic and thus higher sales and profit over recent fiscal quarters, but the company is still set on raising prices three to five percent to offset higher ingredient prices. Part of the cost inflation problem lies in the company’s decision to replace genetically modified ingredients in its menu items with non-GMO ingredients. But the costs of other ingredients have risen as well, including tomatoes, corn, tomatillos, dairy and chicken. The costs of food, beverages and packaging rose 21 percent, accounting for 33.6 percent of total revenue. Nevertheless, profit in the third quarter rose 15 percent.