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The increase in the minimum wage could mean a more expensive burrito in 2019.
Chipotle hired an outside consultant to badyze menu prices, item by item.
"We are behind the price increase," said Jack Hartung, chief financial officer of Chipotle, at Business Insider. "I think we mean we're always late, which means we make Chipotle accessible to everyone."
Read more: Chipotle plans to raise prices while minimum wages increase, but CEO recommends do not panic – they "do not want to be like Whole Foods"
And, Chipotle is not alone.
Channels such as Texas Roadhouse and Habit Burger have mentioned recent or upcoming price increases during presentations at the ICR conference in Orlando, Florida, earlier in January. The cost of out-of-home food has increased by 2.8% in 2018, according to data from the US Bureau of Labor Statistics. The Labor Department predicts that prices will rise by 2 to 3 percent in 2019.
The cost of meals taken outside has skyrocketed for years. Median prices for fast food hamburgers increased 54 percent, while chicken sandwich prices jumped 27 percent, Bloomberg reported in December, citing data from Datbadential.
Price increases occur when the minimum wage increases.
21 states and Washington, DC, increased their minimum wage from 2019. On Wednesday, Democrats in the House introduced a bill that would increase the federal minimum wage to $ 15 an hour, more than double its current rate . Even in the absence of legislation, companies pay more workers when they struggle to hire and retain talent in times of low unemployment.
Read more: Here's how the minimum wage compares to Amazon, Walmart, Costco and other retail giants as companies fight to convince their workers
"Every cost in the business is a challenge," said Brian Niccol, CEO of Chipotle. "The good news is that we have a model in which we can invest in our workforce, and we will use the sales growth badociated with pricing to manage it."
The increase in the minimum wage has contributed to a significant increase in the cost of restaurant meals, particularly with regard to the foods you can buy in grocery stores. In 2018, the cost of home food increased only 0.6%, according to data from the Bureau of Labor Statistics.
The cheaper purchases have prevented some chains from increasing their prices as much as they want, lest the buyers give up their meals altogether. And when some chains keep prices low, others are forced to do the same.
"We are fighting our brains," said John Miller, CEO of Denny, about the restaurant industry's attempts to cut prices from its competitors.
But the struggle to keep prices low can not last forever. While chains will continue to brag about their promises – especially bundles such as 4 for $ 4 or $ 5 boxes – customers will likely have to pay more for their hamburgers and burritos in 2019.
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