Chipotle Mexican Grill serves customers fresh, tasty Mexican dishes at its “fast-casual” outlets. Rising commodity costs, however, could do something the U.S.-based operator’s competition has been unable to do for years — eat away its profits.
Federal statistics showed that in September of this year, the consumer price index rose year-on-year 0.8 percent — the lowest since March 1961. The core index, however, excludes price changes of food and energy costs (viewed as too volatile by most economists to give an accurate reading of inflationary trends).
Rising prices of agricultural products continue trending higher than the core index, with the meat and eggs index up 5.8 percent year-over-year, among the biggest of increases for any food category, according to recent U.S. Bureau of Labor Statistics data.
Though Baja Fresh, Qdoba, Moe’ Southwest Grill, and others aggressively promote a “food fresh” philosophy, Chipotle (CMG) has emerged the market leader in the $4 billion Mexican-themed, fast-casual, dining segment, with 1,023 units opened in 33 states and Toronto, Canada (2) as of September 30.
To read the rest of the story, please go to: CBS Business Network.
