Chipotle Mexican Grill Inc beat estimates for quarterly same-store sales on Thursday, as customers returned to eating inside restaurants and paid more than ever for a new meat – smoked brisket – and other menu items.
The burrito and bowl chain has raised regular menu prices twice and its delivery prices three times since August 2020. Prices are now about 10% higher – which includes a total 17% hike in items for delivery – to offset rising beef, freight and labor costs.
CEO Brian Niccol told Reuters that customers can still get a lot of value out of a Chipotle meal, noting that its chicken burrito is still priced under $8 in many places.
“Because we’ve got such a strong value proposition, we like to take things in phases to make sure that the pricing we’re taking is balanced with the growth that we’re experiencing and that the cost is really not a transitory cost but a new, permanent cost,” he said.
Overall, fast-food chains have raised menu prices by 6.7% over the last 12 months, and other restaurants by 5.2%, the U.S. Bureau of Labor Statistics reported on Oct. 13.
Some of Chipotle’s price hikes will roll off this quarter and customers have not resisted paying more for their quesadillas, Niccol said.
More customers are also coming to Chipotle restaurants as seating areas reopen, and the chain is still on track to build 200 new locations this year, he said.
Chipotle’s limited-time smoked brisket, which launched in September, costs $10.25 on average as an entree in restaurants, its most expensive new meat ever.
The fast-casual chain posted a 15.1% surge in comparable sales for the quarter ended Sept. 30, compared with analysts’ average estimate of 13.4% growth, according to Refinitiv data.
The company also forecast sales growth in the low to mid double-digits range in the current quarter, compared with estimates of 14% growth.
Americans who were cooking more in their kitchens during the pandemic-induced, work-from-home situation are now grabbing burritos and bowls on the way to work and social gatherings, and are trying new dishes.
Sales from digital orders – as opposed to those placed in person – grew 8.6% and accounted for 42.8% of sales.
Chipotle also said its board increased its share repurchase authorization by $100 million, with $209.8 million available to buy back shares as of Sept. 30.
(Reporting by Hilary Russ in New York and Praveen Paramasivam in Bengaluru; Editing by Aditya Soni, Jonathan Oatis and Daniel Wallis)
U.S. stock futures rise following Friday's omicron-sparked selloff – MarketWatch
U.S. stock futures rose late Sunday, following a steep selloff Friday sparked by fears of the global economic impact of a worrisome new strain of COVID-19.
On Friday, Wall Street suffered its worst day in more than a year amid growing concerns over the new omicron variant of COVID-19. The World Health Organization’s technical advisory group on Friday declared it a “variant of concern,” and a number of countries imposed flight bans from countries in southern Africa, where the variant was first discovered.
Little is known about omicron, but investors Friday braced for bad news.
In a holiday-shortened session, the Dow Jones Industrial Average
slumped 905.04 points, or 2.5%, to 34,899.34, with the index logging its worst daily drop since Oct. 28, 2020, according to FactSet data. The S&P 500
fell 106.84 points, or 2.3%, to 4,594.62, and the Nasdaq Composite Index
sank 353.57 points, or 2.2%, to 15,491.66.
“The pandemic and COVID variants remain one of the biggest risks to markets, and are likely to continue to inject volatility over the next year(s),” Keith Lerner, co-chief investment officer and chief market strategist at Truist Advisory Services, wrote in a Friday note. “It’s hard to say at this point how lasting or impactful this latest variant will be for markets.”
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Canadians should experience the fastest drop in gasoline prices in nearly 13 years on Sunday as fears about a virulent new COVID-19 variant are expected to provide a break of 11 cents per litre at the pumps.
Dan McTeague, president of Canadians for Affordable Energy, said the national average price could drop to about $1.32 per litre but begin to rise again midweek.
“(Sunday) represents the single largest decrease at the pumps we’ve seen going back to 2009,” he said in an interview.
Global crude oil prices plunged Friday over fears about a new COVID-19 variant called Omicron that prompted Canada to ban entry for foreign nationals who travelled through southern Africa.
The January crude oil contract fell 13.1 per cent or US$10.24 on Friday and currently stands at US$68.15 per barrel.
The decrease came as U.S. stock markets closed early Friday because of the Thanksgiving holiday.
“Sunday and Monday are going to be the best days for Canadians to fill up, including British Columbia,” McTeague said
Even residents of flood-ravaged B.C. will save on the province’s high gasoline prices despite facing rationing because severe flooding has shut both the Trans Mountain pipeline and the province’s lone refinery.
Drivers of non-essential vehicles can only purchase up to 30 litres per visit to a gas station in the Lower Mainland, Sunshine Coast, Sea to Sky area, Gulf Islands and Vancouver Island.
East Coast residents won’t reap the immediate benefits of Sunday’s price drop because its regulated regional system averages price movements. That provides price predictability but blunts price discounts.
Despite the upcoming decrease, national gasoline prices have surged nearly 43 per cent in the past year as the reopening of the global economy from pandemic lockdowns prompted a recovery in crude prices.
McTeague suggested Canadians shouldn’t get too comfortable with the energy savings. He said prices are expectd to increase as OPEC and its allies, who are meeting on Monday, will likely refuse to increase production any further. Energy traders realize that Friday’s decrease was overdone and “flies in the face of fundamentals,” he added.
“My sense is that the decreases that we saw were a little exaggerated and overbought, and for that reason I think we might see a little bit more balance come back to the markets and fundamentals by Wednesday,” McTeague said.
“Unless there’s further unsettling news of greater and further lockdowns, I would expect that oil prices are probably going to recover US$3 to US$4 a barrel by Monday or Tuesday, which means by Wednesday or Thursday we could be looking at increases in the order of four or five cents a litre.”
McTeague said some gasoline savings will continue for a couple of weeks, but he foresees crude climbing back to about US$90 a barrel, which would translate into prices in Canada exceeding $1.50 per litre.
Impending carbon tax increases will further boost prices.
A tax of 2.5 cents per litre, including HST, will take effect on April 1, 2022. It will be followed in December by the clear fuel standard that will add another 18.1 cents per litre including HST, said McTeague.
Adding to the inflation pressure is the Canadian dollar which is less valuable than when it was at par the last time crude prices were around US$80. That reduces the purchasing power for all kinds of products, including energy and food.
The Canadian Automobile Association said that as of early Saturday morning, Manitoba had the lowest average pump price of $1.35/L, followed closely by Alberta at $1.377, while Newfoundland and Labrador was the highest at $1.583 with British Columbia at $1.558.
This report by The Canadian Press was first published Nov. 27, 2021.
Ross Marowits, The Canadian Press
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