Menu prices are going up at Chipotle to help cover steak, avocados, and cheese expenses.
"It has been nearly three years since our last company-wide price increase, and while we want to remain accessible to our customers, we are at a point where we need to pass along these rapidly rising food costs," Chief Financial Officer Jack Hartung chief financial officer at Chipotle said in a conference call Reuters reported.
Consumers can expect the changes to appear on the menu in the latter part of the current second quarter of the 2014 fiscal year. Everything is expected to be finalized at the beginning of the third quarter Reuters reported.
"We believe we have a lot of pricing power," Hartung said in a statement in answer to analysts questions Reuters reported. "We have built up quite a bit of permission to raise prices. We won't cash in on all of that pricing ability right now, so we will still have some in the bank."
According to Reuters, the company's charges for the aforementioned ingredients panned out to be more than it originally thought at 34.5 percent of the money Chipotle brings in.
The majority of the matter has revolved around the company's cost to buy steak since charges for these have increased 25 percent in 2014 thus far, and is the most Chipotle has seen Reuters reported.
Chipotle anticipates the prices that the prices will account for 36 percent of the company's income throughout for April. The numbers could also surpass the percentage in the upcoming quarters of the 2014 fiscal year. Avocados and cheese costs have also been a burden financially.
In addition to changes in menu prices, Chipotle also announced plans to add 180 to 195 restaurants this year Reuters reported.
According to The Los Angeles Times, Chipotle makes Guacamole with 97,000 pounds of avocados daily amounting to 35.4 million pounds annually. The company aims to make organic and domestic products through environmentally friendly farming methods, however production has experienced issues from low beef, and water supply.
