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re: Should I sell or hold Chipotle (CMG)
Posted on 5/8/24 at 1:48 pm to Roscoe14
Posted on 5/8/24 at 1:48 pm to Roscoe14
quote:They've raised prices 5x in the last 2 years to keep up with market conditions and they've lost no momentum to speak of
But 14% of its restaurants are in California and the recent rise in the minimum wage for fast food restaurants (whose owner's aren't the governor's friends) has forced it to raise prices in that state
They have established and retained a customer base that is downright shockingly inelastic in a niche that does not breed such loyalty. I don't know how much cost containment juice they have left to squeeze to be able to keep that price trajectory going indefinitely (a story which should put them in the Canton of Cost Management first ballot) but if there's one side of the margin equation I wouldn't question going forward it's their top line
Someone wrote a good piece about their customers' price stickiness a few weeks ago, I will link if I can find it
This post was edited on 5/8/24 at 1:53 pm
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