Chipotle CEO says company will cover any tariff-related cost hikes

The CEO of Chipotle has announced that the company will take on any cost increases resulting from new or existing tariffs, rather than passing them on to customers through higher menu prices. This decision reflects the company’s commitment to maintaining affordability and customer loyalty, even amid economic pressures. By absorbing these additional expenses, Chipotle aims to ensure a stable dining experience and shield consumers from the financial impact of global trade tensions.

President Trump’s proposal to levy tariffs on major U.S. trade allies is stirring economic concerns, with both companies and consumers bracing for financial impacts. However, Chipotle customers may not feel the pinch immediately, as checkout prices remain steady for now.

Speaking with Hallie Jackson on “NBC Nightly News” Sunday, Chipotle CEO Scott Boatwright shared that the company plans to maintain current prices for customers, despite rising supply costs. “As of now, we plan to absorb those expenses,” he stated, while acknowledging that sustained cost increases could force future price adjustments.

Chipotle is largely shielded from the full effects of Trump’s proposed tariffs, which include a 25% duty on Canadian and Mexican goods and another 10% on Chinese imports, in addition to a 10% tariff already in place.

Boatwright previously mentioned that half of Chipotle’s avocado supply comes from Mexico, with the remainder sourced from Colombia, Peru, and the Dominican Republic. Overall, he estimated that the tariffs would raise Chipotle’s supply costs by roughly 0.6% over time.

“Thanks to our strong business model, we’re able to absorb these inflationary pressures without shifting the burden onto our customers,” Boatwright told Jackson. “Our goal this year is to keep prices steady, especially given the uncertainty around whether these tariffs are temporary, long-term, or subject to change under future leadership.”

He added, “Passing these costs to customers isn’t fair, since price hikes tend to stick. We’re committed to offering strong value and staying on this path.” Chipotle is currently undergoing a transitional phase, especially after its former CEO Brian Niccol left for Starbucks in August. Since then, the company’s stock has dipped, and it warned in February that 2025 could bring unpredictable conditions and slower-than-expected sales growth.

Still, Boatwright expressed optimism about Chipotle’s future, pointing out plans to open over 300 additional stores. “By keeping prices stable despite inflation and global uncertainties, and offering fresh, varied, high-quality food, we aim to provide true value to customers in 2025,” he said.

He also introduced Chipotle’s new AI assistant, Ava Cado, which is used to streamline the job application process. “Ava automates the initial hiring steps,” he explained. “Applicants interact directly with her - she reviews qualifications, handles applications, and schedules interviews, so managers just need to conduct the interview and proceed with hiring.”

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Source: cnbc‍