In its weekly survey of 10 Chipotle markets, Chicago-based William Blair found that Chipotle raised prices in half of the markets that the investment firm surveyed — San Francisco, Chicago, Denver, Minneapolis and Orlando. In most markets, the price increases occurred due to the rising cost of beef.The city by the bay, however, saw across-the-board price increases averaging 10.5 percent, and William Blair theorizes “the outsized San Francisco price hike was likely because of the increased minimum wages.”In contrast, prices in Chicago, Denver, Minneapolis and Orlando each rose about half a percentage point, nearly entirely due to higher beef prices.San Francisco’s minimum wage was $10.74 an hour in 2014, rose to $11.05 at the start of the year, and increased again to $12.25 in May.
Like any other business, Chipotle has to compete with everyone else in their market space. They have a minimum profit threshold to meet, but if they try to pad the bill too much while seeking better profits their competitors will eat them alive.
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