Chipotle says company will swallow increase in costs from tariffs

Chipotle’s top executive says the Tex-Mex fast food chain has no plans to pass on the costs of tariffs to its customers.

Scott Boatwright, the company CEO, told NBC News over the weekend that Chipotle’s menu prices will remain as they are despite the fact that the cost of goods is expected to rise if and when President Donald Trump’s tariffs go into effect.

“It is our intent as we sit here today to absorb those costs,” Boatwright told NBC News.

Though he acknowledged that the company faced “significant headwind,” Boatwright said that Chipotle is in a position to withstand the turbulent macroeconomic conditions, such as steadily climbing food prices.

“We are fortunate to have such an extraordinary economic model at Chipotle that we can withstand those types of inflationary pressures and not have to pass those costs off to the consumer,” Boatwright told NBC News.

“And that’s our intent this year. Let’s hold pricing constant, because we don’t know if the tariffs are transitory, if they’re going to be permanent, how sticky they’ll be in the new administration.”

Boatwright said that he didn’t think it was “fair to the consumer to pass those costs off to the consumer, because pricing becomes permanent.”

“And so again, back to the idea of delivering extraordinary value to the consumer. We’re going to stay the course,” he said.

Boatwright said that “if we can hold price constant, regardless of what’s happening in inflationary pressures, what’s happening with global economic uncertainty, and give the consumer abundance, [and] variety with wholesome, fresh ingredients that they can’t get anywhere else, that’s how we’ll deliver value for the consumer in 2025.”

The Trump administration is set to impose tariffs on imports from Canada and Mexico starting Tuesday, though the final rate will be determined by the president, according to Commerce Secretary Howard Lutnick.

Trump has warned of potential 25% tariffs on goods from both neighboring countries, citing concerns over the influx of illegal drugs and migrants crossing into the US.

The administration views these measures as a response to what it considers insufficient action from Canada and Mexico in addressing border security issues.

Speaking on Sunday, Lutnick confirmed that the tariffs would move forward as planned but noted that their specifics would depend on ongoing discussions.

In addition to these measures, a 10% tariff on Chinese imports is anticipated.

The US government has accused Beijing of failing to adequately curb the flow of fentanyl into the country, prompting this latest trade action.

If enacted, the new Chinese tariff would push the total levy on affected goods to at least 20%, following an initial 10% tariff implemented last month.

In response, Chinese state media has reported that Beijing is preparing retaliatory measures, potentially escalating tensions between the two largest economies and increasing the likelihood of a broader trade conflict.

In recent months, food prices in the US have experienced moderate inflation.

As of January 2025, the Consumer Price Index for all food increased by 0.6% from December 2024, resulting in a 2.5% year-over-year rise compared to January 2024.

Grocery store prices saw a 0.8% monthly increase, totaling a 1.9% annual rise, while restaurant prices experienced a 0.2% monthly uptick, leading to a 3.4% increase over the past year, with certain categories like meats, poultry, fish, and eggs seeing more significant price hikes.