Chipotle’s Earnings Call Sparked Backlash After CEO Highlighted Six-Figure Customers
“We learned that 60% of our core users are over $100,000 a year in income, in average household income. That gives us confidence that we can lean into that group in a more meaningful way, whether it’s the solo occasion, and or group occasions, to really drive meaningful transaction performance in the year.”
Those were the words of Chipotle CEO Scott Boatwright during a recent earnings call that caused an uproar among the company’s customer base, who interpreted it as justification for raising prices and favortism towards people with higher incomes.
In an Instagram post about the statement, shared by aifortuneclub, the comments section was afire with criticism. Comments ranged from “Stop going there. Give them a new data point,” and “As someone who was crazy over Chipotle at one point. I can honestly say it’s turning into garbage anyway so please don’t think you bigger than the program,” to “I love all the different corporate buzzwords for greed.”
But Boatwright insists that Chipotle is not just for people who make $100,000 or more, and in an interview with Yahoo! Finance, made it clear that his words were taken out of context. What he meant when highlighting the percentage of wealthy Chipotle consumers was that the company plans to “lean into those consumers with brand innovation, menu innovation, and really give them more compelling reasons to come in.”
Chipotle has been working overtime to dispel the claims. The company’s X account even chimed in, responding to a post about Boatwright’s statement with, “Pricing was not mentioned and no additional pricing is being taken for this consumer cohort.”
To help further clarify what Boatwright called “misinformation,” surrounding his remark and the company’s pricing plans, Laurie Schalow, Chipotle’s chief corporate affairs officer, released a statement:
“CEO Scott Boatwright stated on Chipotle’s earnings call last week that 60 percent of its customers have an average household income over $100,000, so the company sees an opportunity to lean into these customers with new occasions like group or solo dining experiences. Since this consumer population is actively spending more at shops and restaurants today, Chipotle is giving them additional reasons to visit with new marketing and menu innovations as well as enhancing the digital experience for all guests. Pricing was never mentioned regarding this consumer cohort and Chipotle has taken a slow and measured approach by only increasing prices in this quarter around 0.7 percent compared to the industry average of 4 percent.”
Chipotle is for “all lifestyles,” according to Boatwright, who pointed out the affordability of the recently launched high-protein menu. The company’s management also said that prices will only rise by 1% to 2% this year, adding that, when you take inflation into account, they’re eating the margin to avoid a decrease in traffic.
Feature photo: “Chipotle Mexican Grill, Manchester, CT 9/2014, by Mike Mozart of TheToyChannel and JeepersMedia on YouTube. #Chipotle” by Mike Mozart, CC BY 2.0
