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.
I’m 60. Restaurant food is kinda like roller coasters. It’s a really big deal when you are younger. When you are older, it’s not really worth the trouble.
We do restaurants mainly out of convenience, with the rare exception of the good pizza places, which we hit once every four or five months.
I thought herds didn't like to be branded.
We prefer to eat at home most of the time (high quality food and wine at low prices, cooked just the way you like it!) but its nice to break the routine now and then and catch a bite to eat at a local Italian cafe where its never crowded, consistently great and fresh food, and downright reasonable prices. Limited selection of wine and beer but the pizza is incredible. You can’t have everything. ;)
I personally don’t enjoy being in trendy restaurants and overpaying for food and marginal service, but understand that some people do. Just a matter of lifestyle preferences I guess. To each his own.
Never been there but can visualize what you’re talking about. Big brother and all that.
The pizza at Mellow Mushroom lasts longer if you load up on the pretzels (kosher salt and butter, with the beer cheese add on) first.
Like any product, there’s a price point sweet spot beyond which sales will decrease. Chipotle has been expanding like crazy and between that and having prices below what it’s customers are willing to pay for their product, yes, sales are going to increase.
Now up the price of a burrito to $20, and watch what happens.
Raw concrete walls, stainless steel tables, seats with no back rests, no ornamentation, long lines of sheeple waiting for their food.
The food was OK, but the atmosphere was oppressive, like they wanted me to eat and LEAVE.
I guess that is the intent.
Crappy place; not that I care much for mexican food anyway. Too much starch, too much pasty, mushed cardboard refried beans. Won’t ever go there again so the price paid is up to the schmoes who continue to pay premium prices for subpar food.
That's what I thought.
What's to complain about?
I must be getting a lot older. The waiters are really starting to annoy me. Their conversational ability seems to be limited to one phrase: “no problem”. But there’s usually a problem of some type (e.g., no napkins, insufficient utensils, one dollup of ketchup left in the bottle, dirty plates, etc.). The one thing you can count on, however, is that service will dramatically improve when its time to pay for the meal. They’ll bring that to you right away — “no problem”.
Hipsters are gladly paying $20 for “lobster roll” sandwiches because someone somewhere online told them it was “goooooooooooooood”
Sounds institutional. lol
I like chipotle, but the only time I have it is when I want something a little more than fast food but don’t have the time/money for a restaurant, and there isn’t a good diner around. Good for dinner in the theater district.
When I lived in Seattle, restaurants were a huge hassle. Parking, traffic, and other annoyances made it an event best avoided. Now that I’m in a small town in KY, the problem is that the nearest civilization is 15 minutes away at 70 mph. And that’s if you want McDonalds or really bad chinese all you can eat.
But even in Louisville, if we’re willing to take the 90 minute drive, there is no traffic and plenty of parking. But yeah, at my age I don’t want any banter with the wait staff. Just get me my stuff and don’t make me wait a half your for my bill. I’ve actually gone up to the register quite a few times without my bill.
I’ve feel discouraged about going to a restaurant simply because the hype it draws. Around here, people talk about Chipotle, HuHot, Metropolitan Grill, and sushi in general in this fashion. The food isn’t bad at these places, but because of the overrated hype, I avoid them the most. I’ll take a small mom/pop restaurant any day over these places.
That being said, my vice is In n Out.
Sure. There will always be people who do things like buy Pet Rocks because it’s the in/cool thing to do.
But those are fads that burn out pretty quickly. Chipotle’s growth, while definitely having some drive by hipsters looking to fo the “in” thing, doesn’t appear to be a fad. Their core demographic seem to be the lunchime professional crowd, with suburbanites being a secondary one.
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.
LOL. Enjoy your 5 dollar, barely beef burger at the fast food chain of your choice.
I’m happy to pay a premium for food that has flavor. The food trucks you disparage are making original food that is really good. Yes, you can still find your hot dog wagon, but that’s not what I’m talking about.
If that makes me a hipster douchebag, so be it.
Take a gander at their menus.
Eating at Chipotle is more likely to add something to their hips. Those burritos are laden with calories.
Yes indeed. Post-Industrial Chic, I guess
It’s overpriced. Plenty of good burgers and barbeque sandwiches available for below $8.
The food at the wagons is NOT that good and some grudgingly admit that the prices are extreme.
If you like being exploited to be on the cusp of a commercial trend, so be it and have a happy day.
Chipotle here in L.A. has opened an Asian version that is goog. It’s called Shop House Kitchen.
It’s the same concept:
That is good.
another food & beverage trend is the “limited release” (as in one day availability) high end beers (that can be between 8-13% alcohol). Pricing per 12 oz bottle can range from $8-12 (and if you “pass” on it, you miss out, so sad).
Some people like being gouged I guess.
They can be good, they aren’t better than a $10-15 22oz “bomber” yet cost almost twice as much and they don’t all “live up to the hype”. Then again, the product usually sells out before the first review hits the internets.
There’s nothing wrong with sucking money out of the home-equity ATM, and buying overpriced tacos at trendy fast-food joints.
That’s the American way.
I used to like Chipotle, but I refuse to patronize them anymore. Not only did the raise their prices, they also decreased portion sizes. When Chipotle started, they had huge burritos with decent meat and veggies. Now, it’s $10 for a burrito and a drink and the burritos are the size of Taco Bell’s.
You can raise prices or reduce portions. But not both. No way I’m paying that premium.
You've got that right!
The problem I see here is that when one food chain raises their price,it gives a “go” signal to the others & then we ALL pay more
Yes, you can get your coffee cheaper at a gas station, go to Best Buy to get a cheap knockoff tablet or buy some rotgut at your local liquor store. Or you can go to Taco Bell to get your burrito on the cheap if you don't want to pay the price that Chipotle charges.
I'm surprised with some of the negative comments here about out capitalist system.
Hubby and I eat every meal at home except on Wednesday night and that is just an excuse to get out of the house together.
We don’t do anything fancy. We have a Mexican place here that does 2 for 1 on Wednesdays. I’ve found a really nice and cheap Chinese place. We usually don’t spend over $15 on dinner for us.
My Wisconsin local Chipotle is still at $6.95 for the Burrito.
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