Chipotle Mexican Grill has announced that it does not plan to raise prices in response to tariffs imposed by the Trump administration on Mexican imports. CEO Scott Boatwright stated that the company will absorb the additional costs, even as tariffs could increase expenses for key ingredients like avocados.
“It is our intent as we sit here today to absorb those costs,” Boatwright said in an interview with NBC News. He added that Chipotle’s strong economic model allows it to withstand inflationary pressures without passing costs onto consumers.
Why It Matters
The Trump administration has introduced a 25 percent tariff on Mexican imports, which is expected to impact various U.S. industries reliant on goods from Mexico. For Chipotle, which sources about 50 percent of its avocados from Mexico, the policy could raise costs by an estimated 0.6 percent, according to Boatwright in his interview with NBC News.
Consumers and businesses alike are watching closely to see if companies will pass these costs along in the form of higher prices. Chipotle’s decision to maintain stable prices, at least for now, contrasts with broader inflation trends in the restaurant sector.
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What To Know
Boatwright stated that while Chipotle will absorb the costs associated with tariffs, the company is keeping a close eye on economic conditions.
Despite Chipotle’s current stance, the broader restaurant industry has already faced increased costs due to inflation. In October, the company implemented a 2 percent price increase to offset higher costs, according to a statement from Laurie Schalow, Chipotle’s chief corporate affairs officer, obtained by Nextstar.
Tariffs on Mexican imports could have lasting implications for the food industry, particularly for businesses reliant on Mexican-sourced ingredients. Chipotle’s ability to maintain pricing stability will depend on how long tariffs remain in place and whether suppliers pass on increased costs.
Other restaurant chains may respond differently, potentially leading to industry-wide price increases. Some companies have already signaled that tariffs will necessitate higher prices for consumers, reflecting broader supply chain challenges.
What People Are Saying
Laurie Schalow, chief corporate affairs officer for Chipotle, told Newsweek: “It is our intent today to hold pricing constant because we don’t know if the tariffs are transitory, if they’re going to be permanent, or how they will impact our business in the future.”
Scott Boatwright, CEO of Chipotle, said in an interview with NBC News: “We don’t think it’s fair to the consumer to pass those costs off to the consumer, because pricing becomes permanent. And so again, back to the idea of delivering extraordinary value to the consumer. We’re going to stay the course.”
What Happens Next
Chipotle’s decision to hold prices steady will likely be tested as economic conditions shift and the long-term impact of tariffs becomes clearer. The company has left open the possibility of revisiting its pricing strategy.