Skip to comments.Trendy Chipotle burritos show how pricing power belongs to the hip
Posted on 07/29/2014 6:28:27 AM PDT by C19fan
Corporate America can learn a lot from a chicken burrito. As many companies struggle to boost prices without alienating consumers, they may want to study Mexican-food chain Chipotle, which has managed to do both.
Companies including Chipotle Mexican Grill Inc (CMG.N), Apple Inc (AAPL.O) and PepsiCo (PEP.N) have shown they're able to take advantage of quality, trendiness, and, in the case of Pepsi's snack foods, market dominance, to maintain high prices or even raise them faster than the inflation rate, now at about 2.1 percent in the U.S. Chipotle raised chicken-dish prices by 5 percent this year after leaving them untouched since 2011, and sales went up 29 percent last quarter.
(Excerpt) Read more at finance.yahoo.com ...
Sheep paying a premium to make sure they’re safely enfolded into the herd.
Increase your prices and your sales will automatically increase! Whodda thunk! I wonder why the capitalists never thought of that when they were running the country and the economy.
As a spice, I like chipotle. As a food chain, not so much.
A modest price increase after 3 yrs. does not seem unreasonable to most people.
kinda like a fool and his money, eh?
Never had one of their burritos. Then again, I live in a town where you can buy excellent burritos from any number of locally-owned family businesses.
People shop for quality and value. Chipolte's advertising and product emphasize that. Another one with many healthy choices is Panera...another long line at busy times. Ever heard of DeBella's...fresh baked breads, good ingredients and preparation. Yep, crowded.
What's my point? Many people, as they have to think of where to cut back, will absorb a small price increase if there's value and quality.
“Sheep paying a premium...”
In general, dining out is very expensive. But you’re right, the sheeple enjoy gathering at crowded watering holes and getting fleeced — and then paying a 20% tip on top of that for poor service. Go figure.
We’ve gotten to where we VERY rarely eat at restaurants and find that when we do the food is not only no better, but often worse than what we can prepare ourselves.
And the beef from the last steer we slaughtered is amazing.
I’ve never eaten at Chipotle....I don’t support lefties.
The one thing we do LOVE to eat at restaurants is Wicks or Mellow Mushroom pizza. We make it count, though. We get three meals out of a pizza.
Fads are great, while they last.... a few years from now we’ll be reading how Chipotle is struggling...
That’s the problem with fads.... Krispy Kreme anyone?
Hipster douchebags (aka “foodies”) have bought into trends like paying $11 for a hamburger from a food wagon “OMGFOODGASMNOMNOMNOM!”
Low information consumers being played like a fiddle.
Good to know - At least I’m not missing anything!
The competitors (like Mission Burrito and Freebirds) have likewise taken the opportunity to push up prices and nix longstanding weekly sales promotions.
It’s easy to maintain market share when they all (through collusion or “chance”) raise their prices at the same time.
Similar food but BETTER:
Places like Chipotle often sell to “groups” (co-workers, weekend sports teams, college students, etc.). It’s also easy to “nudge” the pricing if their peers continue to go there for lunch (”What, you aren’t coming?”).
The “decor” at Chipotle reminds me of the company cafeteria in Orwell’s 1984.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.