Does this surprise anyone? Other than Ronda Rousey, Chipotle has taken the most Ls on Earth by far, especially over the last two years. Ever since their E. coli outbreak triggered sharp revenue declines, Chipotle has been running in quicksand.
As everyone knows or at least should know by now, President Trump has proposed a 20% tariff on goods from Mexico as a way to help pay for a wall along the US-Mexico border. So OF COURSE, President Trump’s proposed Mexican import tariff is going to accidentally shit all over Chipotle. Who else?
Via Business Insider:
An avocado price increase in particular would be a huge challenge for Chipotle, which goes through more than 99 million pounds of avocados each year — and during some months, sources them exclusively from Mexico. Chipotle may get as many as 70 million pounds of avocados from Mexico annually.
Our belief is that the company generally obtains about 70-90% of its avocados from Mexico, all of its limes, the majority of its jalapenos, less than half of its tomatoes, and small amounts of other items (e.g., cilantro). In other words, should a 20% tariff be enacted for goods imported from Mexico, Chipotle likely would bear the biggest brunt of this potential impact on food costs compared to the other companies we cover.
Chipotle spokesman Chris Arnold commented on the issue:
There are a host of variables that can impact upon food costs (weather, supply and demand, and public policy decisions, among others). If any events impact our food costs in material ways, we’ll make that information available in a timely fashion, but we’re not going to speculate about what any of these events might mean.”
If a border tax on Mexico is enacted, it’s likely restaurant chains will be forced to increase menu prices to offset the higher cost of goods.
No shit. The customers always get the worst end of the stick. One day we’re electing a president we think is going to make our country great again, the next we may be paying $4 for guac.
